The Dow Jones-Irwin Guide to Zero Coupon Investments
In this clearly presented overview, author Donald R. Nichols discusses the rather wide variety of zero coupon investments, delineating their characteristics, advantages, and disadvantages, and indicating what sort of investor would be attracted to a particular instrument. After this introduction to zero coupon investments, Nichols considers how the investor may use them to achieve various investment goals (for example, capital growth or current income). He methodically analyzes how to manage these investments as part of one’s overall investment portfolio. He also discusses the potential for using zero coupon investments with individual retirement accounts (IRAs) and investing for one’s children by using them with Uniform Gifts to Minors Accounts.
Nichols then provides examples of the use of zero coupon investments in some actual portfolios in order to give an idea of how they can work in real life. The author closes by considering possible future types of zero coupon investments. The book is indexed and has a helpful glossary.
Throughout this book, Nichols deals with what to many may be a daunting subject in a clear, lucid, straightforward manner. His tone is calm, even reassuring. If awards were given for writing simply (though not simplistically) and understandably about investments, Nichols would win hands down.
Though experienced investors will, perhaps, skip some portions of this book, all investors should find it to be a useful, relevant reference.