3. What’s Next for Your Personal Financial Plan?

Talk with various people who have invested in government, municipal, or corporate bonds.

Discuss with other household members why bonds might be a logical choice for your investment program.

Purpose: To determine if a specific corporate bond can help you attain your financial goals.
Financial Planning Activities: No checklist can serve as a foolproof guide for choosing a corporate bond. However, the following questions will help you evaluate a potential bond investment. This sheet is also available in an Excel spreadsheet format in Connect Finance.
Suggested Websites: www.morningstar.com, www.finra.org

Category 1: Information about the Corporation 1. What is the corporation’s name, website address, and phone number?______________ 2. What type of products or services does this firm provide?________________ 3. Briefly describe the prospects for this company. (Include significant factors like product development, plans for expansion, plans for mergers, etc.)____________ Category 2: Bond Basics 4. What type of bond is this?______________ 5. What is the face value for this bond?______________ 6. What is the interest rate for this bond?______________ 7. What is the dollar amount of annual interest for this bond?______________ 8. When are interest payments made to bondholders?______________ 9. Is the corporation currently paying interest as scheduled? ☐ Yes ☐ No______________ 0. What is the maturity date for this bond?______________ 1. What is Moody’s rating for this bond?______________ 2. What is Standard & Poor’s rating for this bond?______________ 3. What do these ratings mean?______________ 4. What was the original issue date?______________ 5. Who is the trustee for this bond issue?______________ 6. Is the bond callable? If so, when?______________ 7. Is the bond secured with collateral? If so, what? ☐ Yes ☐ No______________ Category 3: Financial Performance 8. What are the firm’s earnings per share for the last year?______________ 9. Have the firm’s earnings increased over the past five years?______________ 10. What are the firm’s projected earnings for the next year?______________ 11. Do the analysts indicate that this is a good time to invest in this company? Why or why not?______________ 12. Briefly describe any other information that you obtained from Moody’s, Standard & Poor’s, or other sources of information.______________ A Word of Caution The above checklist is not a cure-all, but it does provide some very sound questions that you should answer before making a decision to invest in bonds. If you need other information, you are responsible for obtaining it and for determining how it affects your potential investment.