> You could start by teaching us. Or, if everyone else on this list understands > what you're > talking about, you could teach me. I'm very ordinary. > > Joanna
"STRIPS" stand for "Separate Trading of Registered Interest and Principal Securities". As Bird and Fortune tell here: http://www.youtube.com/watch?v=mzJmTCYmo9g the financial markets have an exceptional ability for finding "very good" names. In the US, coupon paying bonds pay two coupons per year and the principal at maturity. For example, a two year 5% coupon bond with a principal of $100 and issued on January 2010 make the following coupon payments: July 2010 - $5 January 2011 - $5 July 2011 - $5 January 2012 - $5 Also you have the principal payment: January 2012 - $100 If you buy the above bond, the above are the payments you will get. But, you can buy each of these payments separately also, if they are included in the STRIPS program. See this: "Backed by the U.S. government, STRIPS, which were first introduced in 1985, offer minimal risk and some tax benefits in certain states, replacing TIGRs and CATS as the dominant zero-coupon U.S. security." Read more: http://www.investopedia.com/terms/t/treasurystrips.asp#ixzz20KbUvTsh Of course, the above statement is garbage, because if you buy a $100 principal STRIP to be paid, say, on January 2042, that is, 30 years later, you are gambling bad. Such a thing could be selling 10 cents to the dollar today, 20 cents to the dollar a few days later and 5 cents to the dollar a week from that. The risk associated with such things is enormous. Don't do this at home, if you don't know what you are doing is what I would say. Best, Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
