Pro's & Con's of Investing in Bonds

Written 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 asrepparttar issuer. In return for investing inrepparttar 149779 bond,repparttar 149780 issuer promises to pay you a specified rate of interest duringrepparttar 149781 life ofrepparttar 149782 bond and to repayrepparttar 149783 face value ofrepparttar 149784 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 torepparttar 149785 value that they are worth. They offer some protection against stocks related losses in a portfolio.

Getting Started In Investing

Written by Mika Hamilton

Are you ready to open your pathway to financial independence?

Well you should be. The soonerrepparttar better. But, how do you get started?

There is so much to know about investing andrepparttar 149778 truth is it will take a lot of training and guidance in order to getrepparttar 149779 hang of it. With our fast paced and ever changing economy, it will be hard to fit intorepparttar 149780 market with no experience. Sorepparttar 149781 sooner you get startedrepparttar 149782 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 Basics

Investing refers torepparttar 149783 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 inrepparttar 149784 future. You could also invest in an capital investment, which isrepparttar 149785 exchange of money by a business for an addition to their ability to produce. No matter what you decide to invest in,repparttar 149786 fundamentals arerepparttar 149787 same. You are basically buying risk.repparttar 149788 more risk you take on,repparttar 149789 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.

Investing Tips

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 evaluaterepparttar 149790 background ofrepparttar 149791 brokerage firm or individual banker with whom you intend to do business with, before you hand over your money.

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