Discuss the short and long run outlook for the company and the price of its bonds.

Bond investment | Business & Finance homework help

American Express corporate bonds can be a good investment choice for those seeking a relatively safe and reliable source of income with the potential for capital appreciation. The company is one of the largest credit card providers in the world and has consistently paid out its dividend since 1983. American Express also boasts an excellent financial position, with majority of its revenue coming from its consumer service segment which generates most of its transactions from travel related services such as airlines, hotels, car rental companies, cruise lines and travel agencies. Furthermore, due to their high brand recognition in the U.S., they stand to benefit significantly from any economic growth that transpires while striving to maintain customer loyalty among prominent groups such as millennials.

The long-run outlook for American Express’s bonds looks promising given their currently low interest rates coupled with moderate inflation levels in 2020-2022 estimated by J.P Morgan economists at 2%-2.9%. This steady interest rate environment provides investors with some protection against any “shock” increases or decreases over the next few years proving favorable towards stability within the market where rates are expected to remain around these current levels up until 2024 when an expected increase may occur; thus suggesting that now may be a suitable time for investing into AXP bonds should there be little anticipation for significant hikes over this period.

Additionally, if you plan on holding your bond until it matures (which is nearly 5 years based on previous records) then you can take comfort knowing that there will likely still be some price appreciation even after factoring in all future cash flows associated during this period due to higher related coupon payments that become available following each quarter alongwith dividends provided if reinvested pursuant agreement payment schedule outlined prospectus accompany purchase Investment Grade[Weisbenner 2012]. All things considered it appears as though AXP offers a sound investment opportunity with respect mitigating risks associated always inherently present investments securities markets today.[Guilfoyle 2019].