What are Bonds?
Bonds are sold by companies and the government in order to fund projects or ongoing business operations. An investor can purchase bonds for a set price with a coupon percentage. The bond issuer will then give the buyer the amount according to the coupon percentage each year. When the bond matures, the issuer will pay back the original value of the bond to the buyer. Bonds can be sold and bought even before the bond matures.
Wealth Management and Bonds
Bonds are an important part of any diversified financial portfolio. Generally, bonds tend to be less risky than stock investments. However, there are still some risks involved in purchasing stocks. Doing the necessary research and understanding market rates are an important part of investing in bonds.
Managing Your Bonds
When you invest in bonds, you need to monitor market and interest rates. Sometimes, depending on the market, investing in bonds will be more profitable than investing in stocks and vice versa. Watching the market and knowing the behavior of bonds can help you understand the best times to buy and sell bonds. Just as with any investment, it is important to diversify. It is beneficial to invest in a combination of corporate and government bonds.
Our Certified Financial Planners©
After understanding your financial goals, your financial advisor will help you choose the best bonds for your portfolio. We can also advise you on the best time to trade your bonds. We will walk you through the investment planning process to ensure that you make the right choices with your money.
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