Pro's & Con's of Investing in BondsWritten by Mika Hamilton
What are Bonds?
A bond is a debt security, by which you are lending money to a government, municipality, corporation, federal agency or other entity known as issuer. In return for investing in bond, issuer promises to pay you a specified rate of interest during life of bond and to repay face value of bond (the principal) when it becomes due.
Why Invest in Bonds?
It is always prudent for an investor to maintain a diversified investment portfolio consisting of bonds, stocks and cash in varying percentages, depending upon individual circumstances and objectives. Bonds help you to diversify your portfolio, thereby, reducing your risk exposure.
Investing in bonds provides a predictable stream of income and repayment of principal.
Bonds maturing within three to five years will hold on to value that they are worth. They offer some protection against stocks related losses in a portfolio.
Getting Started In InvestingWritten by Mika Hamilton
Are you ready to open your pathway to financial independence?
Well you should be. The sooner better. But, how do you get started?
There is so much to know about investing and truth is it will take a lot of training and guidance in order to get hang of it. With our fast paced and ever changing economy, it will be hard to fit into market with no experience. So sooner you get started better. You can start anywhere, read books, websites, financial publications, magazines, attend courses, seminars etc. but no matter what you do, make sure you start right now!
Investing refers to accumulation of some kind of asset in hopes of getting a future return from it. There are several different ways you can invest your money. You can invest in a bond, which is exchanging money for a promise of more money in future. You could also invest in an capital investment, which is exchange of money by a business for an addition to their ability to produce. No matter what you decide to invest in, fundamentals are same. You are basically buying risk. more risk you take on, higher price you can sell it for. That's basically what all investing boils down to. As an investor you are really becoming a risk manger.
The number one tip is to invest wisely, do some research to figure out what kinds of questions you should be asking. A few common sense questions would be those that evaluate background of brokerage firm or individual banker with whom you intend to do business with, before you hand over your money.