European bond markets education and training helps investors and advisers understand more about the bond market in Europe. Bond markets are similar in structure to those in the United States, but returns may vary greatly. Since bond prices fall when interest rates go up, they may outperform domestic bonds when the United States is raising interest rates and European countries are not.

Before trading in European bonds, it's important to understand the basics of the European bond market and the current economic conditions in Europe, as well as bond trading in general. Buying and selling bonds is a safer investment than other securities, but can still carry some risk, so investments should be made with care. Some ways to learn more about buying European bonds include:

1. Get an overview of economic conditions and bond markets in Europe.

2. Learn the basics of United States and foreign bond trading.

3. Improve your skills and career with advanced bond and securities training.

Action Steps
The best contacts and resources to help you get it done

Learn about foreign markets and get European bond quotes

Before making any moves in the European bond market, an investor needs to be aware of the current state of the market. Staying up to date on Europe's economy and getting an overview of the European bond market will help you to make wise investments.

I recommend: CNN Money covers foreign market news and prices. Bloomberg features up to the minute news on foreign bond markets. Read an article from BondsOnline that discusses some of the benefits and risks of European bonds.

Study tutorials on Euro bonds and general bond trading

If you're unfamiliar with bond trading, a tutorial can help. Start with a general bond trading tutorial or check out advanced training on Euro bonds.

I recommend: Get an overview from Forbes' Investopedia with links to bond basic tutorials and foreign market information. Eurobonds also provides tutorials and information. Schaeffer's Investment Research offers an advanced bond trading tutorial.

Get training and licensing for a career in trading domestic and Euro bonds

An interest in European and domestic bond trading could lead to a position as a bond trader. A career in bond trading usually requires a bachelor's or advanced degree. Required licensing varies by state and includes Series 7 licensing. Refresher courses and additional training is often available through self-paced online courses.

I recommend: Salary lists programs in the United States that offer finance and bond trading education. Bond trading courses from the New York Institute of Finance focus on trading tactics. Johnson Lipman has been providing Series 7 training for more than 20 years.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Keep up to date on your investments to gauge the market and determine when to purchase or sell bonds. Read financial news and check European bond listings regularly.

Bond markets in Europe became more accessible to the average investor in 1999 with the advent of the European Monetary Union. The European Monetary Union collapsed 11 different currencies into one, the Euro. Because of this monetary change, the Europe bond markets do not require complicated currency conversions for each country and can be more competitive with their US counterparts on a consolidated currency basis.

European bonds can offer a safe haven for your investments during turbulent economic times in the US economy. However, with the increasing interconnectivity of global markets, movement of the US bond market does not necessarily demonstrate an inverse relationship to the pricing of European bond markets. The decision to buy European bonds is more complicated than a simple safe haven strategy. You will need to consider a few items prior to buying European bonds:

1. Understand the basics of the European bond market.

2. Verify the positives and negatives of investing in Euro bonds.

3. Determine how and if you want to invest in European bonds.

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Study the history and basics of the European bond market

As with any investment, there is some amount of risk involved. Bonds generally carry much lower risk than other securities, but understanding how these investment vehicles trade can lessen the risk even further. Without proper research of the bond market in Europe, you would be better off investing randomly in these markets. The structuring of European bonds work in essentially the same manner as US bonds.

I recommend: Read a tutorial on bond basics that describes in detail the structure and pricing of bonds. Even though the differences in the two bond markets are negligible, there is verbiage and market specific information that you should understand.

Examine the opportunities and threats of investing in the European bond market

When investing in a foreign market, there are more issues that come into play than a domestic market investment. The currency exchange rates for the Euro can directly impact an investment in the European bond market. In addition, political turmoil can indirectly influence the profitability of Euro bonds.

I recommend: Evaluate the pros and cons of investing overseas. The website Accumulating Money offers a brief description of the possible risk of overseas investing. Track the prices of European bonds compared to the US bonds. Bloomberg.com offers a real-time update on every major bond market.

Decide whether you want to invest in the European bond market

As with every investment decision, there are many factors involved. You need to determine the rate of return you want from the investment. Then, which investment vehicle matches your monetary needs. After the evaluation, there could other more sensible investment opportunities that match your business needs.

I recommend: Keep track of the European bond markets and compare these investment vehicles with other investments. Read "Things to Consider When Buying Bonds" by Morningstar.com. If you decide to purchase European bonds as an investment, you can try Shop4bonds.com, which offers a 14-day free trial.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Investing in any security requires a copious amount of study and knowledge. Therefore, before investing any assets, you should consult an investment professional for advice on the purchase.

While the basic principles of the European bond markets are similar to that of the United States, there are some things that make investing a bit different. How bond yields are calculated and the central bank that affects prices are just two examples.

Take the time to familiarize yourself with some of the terms you might come across while investing or reading about European bond markets. Here are some of those terms along with some quality resources to help get you started.

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European government bonds

European government bonds are bonds that are issued by governments, sovereign entities or corporations directly associated with the government. Much like the bonds issued for investment by the United States treasury, countries in Europe issue bonds as well. In theory, these bonds are a safer investment because they are state sponsored, as opposed to privately or publicly held bonds.

I recommend: Visit Investing in BondsEurope.org for additional information on European Government Bonds.

Corporate bonds

Corporate bonds are issued by privately or publicly held companies that are raising capital to grow and expand their business. These bonds provide a return on investment in the form of an interest rate that is paid to the investor on a set date of maturity. When it comes to European corporate bonds, other factors such as the price of currency and tax implications must be factored into investment.

I recommend: Visit the European section of the Pimco investment website for a further tutorial on European bond and bond markets.

Eurobond secondary market

The Eurobond Secondary Market refers to the actual market where issued bonds are traded among investors and investing institutions.

I recommend: Visit Eurobonds.info for additional information about the Eurobond Secondary Market.

Basis

In terms of the European Bond Market, 'basis' is used as a multiplier to calculate the interest received or paid over a given amount of time. It is important to note in this calculation that, unlike the American formula, every month is figured as 30 days.

I recommend: Visit Financial-edu.com for more information on calculating "basis" for Eurobonds.

European Covered Bond Council (ECBC)

The European Covered Bond Council, or ECBC, is an organization that works alongside members of every aspect of the European bond market. From issuers to analysts to investors and more, the ECBC focuses on providing greater transparency into the metrics of the market, as well as facilitating dialogue among these key players.

I recommend: Visit the European Covered Bond Council website for more information on the purpose and mission of the council.

Euromarket

The Euromarket refers to the market that houses all the countries of the European Union. Since many of the countries use the same currency, all tariffs for trading within the Euromarket have been absolved. The Euromarket also shares the same bank, named the European Central Bank. The European Bond Market is under the umbrella of the Euromarket and its yields and other bond metrics are affected by the European Central Bank.

I recommend: Investopedia provides more information on the Euromarket and all that it encompasses.

Buying European bonds is a good way to put your money in a reliable investment while also diversifying your portfolio. Because you won't see European bond markets news and trends on your local news, however, you'll need to use other resources to keep up with the most relevant developments.

Fortunately, there are a number of fantastic financial websites that give you access to the latest information on how the bond markets in Europe are performing. Some require membership to use their tools and get instant updates, but, for the most part, you can get the stories you need to make decisions for free. When you decide to buy European bonds, keep the following facts in mind:

1. Get the latest European bond market news from online news agencies

2. European bond listings and quotes are available online

3. Use business magazines and journals to follow long-term market trends.

Action Steps
The best contacts and resources to help you get it done

Check for daily updates on Europe bond markets

Economics and business magazines do a good job of tracking changes in the European bond market over the long-term, but for short-term updates, you'll need to check news websites online. If a European corporation or central bank decides to change its bond rate, or if a related financial event causes them to move, you can count on these sites to give you timely coverage and quality reports.

I recommend: Forbes and the Wall Street Journal are two of the best online sources for news about Euro bonds. They both offer a blend of breaking financial news and in-depth analysis that's essential for smart investing.

Get Euro bond quotes online

News agencies and business magazines give you analysis and advice for investing in European bonds, but you can also do your own research by finding bond quotes online. Online listings and indices allow you to track your investments and decide which bonds to buy without relying on someone else's advice, giving you the freedom you need to optimize your returns.

I recommend: To get quotes for European government bonds, head to Bloomberg online. If you're interested in European corporate bonds, check out the selection of quotes at Euronext.

Track long-term Europe bond market trends

Following monthly and annual trends in the bond markets is almost as important as staying up-to-date with daily price movements. An easy way to accomplish this is by keeping up with research in online business magazines and journals.

I recommend: EuroMoney is a good source of Euro-specific bond analysis and research. For a broader look at the European bond market's place in the worldwide economy, consider giving Global Investor Magazine a try.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you're investing in European bonds, watch for changes in the relevant exchange rates. A dip in the value of the euro, dollar or pound can cause bond prices to fluctuate.