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Beautiful about bonds is that they can prove to be a great option for everyone who needs some stability, predictable yield, or even a means to further diversify portfolios. Simply, bonds are not very exciting compared to stocks, but they do have a pretty interesting blend of pros and cons. Once you want to time ups and downs in the stock market or need a safer long-term alternative investment, then bonds could be what you are looking for.
All bonds have character, and research a little to see which bond fits well into your goal. Cheers and happy investing.

1. Buy Direct: You can buy government bonds directly through web sites such as Treasury Direct, or you can use a brokerage for corporate and municipal bonds.
2. Invest in Bond Funds: If you want easy access to a wide range of bonds, then you can consider bond funds such as mutual funds or ETFs. They offer diversity and flexibility but do not provide steady interest like holding individual bonds.
3. Hire a Financial Advisor: A financial advisor can guide you, even if you do not know where to begin. In that manner, he can help you build up a bond portfolio tailored according to your goals and

• Interest Rate Risk: As interest rates rise, the prices of bonds fall. You may have to sell the bond before its maturity and incur some loss.
• Credit Risk: A company (or, much less often, the government) with financial issues may not even pay interest or default on the principal.
• Inflation Risk: Inflation will eat into the purchasing power of the fixed interest rate that the bond will pay, especially if the bond matures over several years.
• Liquidity Risk: Some bonds are harder to sell, especially in less developed markets.

Good reasons to invest in bonds for many specific ones include:
• Guaranteed Income Stream: Bonds provide a fixed stream of interest. That is very convenient, especially for an aging population or conservative investors.
• Less Risk: Bonds are less volatile than the stock market. Government bonds are virtually risk-free.
• Diversification: Bonds diversify a portfolio made up of stocks. If the stocks are going up and down, bonds tend to smooth out the ride.
• Repayment of Principal: When the term is over, you get your contribution if the issuer does not default.

Not all bonds are the same. There are types of issuers with its associated varying levels of risk and benefits:
1. Government Bonds: Recommended by the national governments, one example is U.S. Treasury bonds. In general, they are risk-free because they are issued or guaranteed by the government. A high-interest-rate bond pays a lesser interest rate but holds a very minimal risk of losing money.
2. Corporate Bonds: This is for corporate companies to raise funds for some specific undertaking or cost. They have a higher return than for government bonds but also much more risk.
3. Municipal B

A bond is essentially a loan. When you purchase a bond, you are essentially lending money to an organization-perhaps to a government or a city-and they agree to repay you along with some form of interest, over some period of time.
All bonds have some basics:
Face Value: That is the amount which the organization promises to return to you at the end.
Interest Rate (or "Coupon" Rate): The rate at which they will pay you regularly as interest in percent of the face value.
Maturity Date: The date when they will return your original investment.
Let's assume you bought a $1,000 bond that pays 3

So, bonds, right? These sound pretty complicated. Not really, however. Bonds are simply the way through which companies, governments, come to borrow from us-and our fellow citizens-for the promise of interest paid on them. A simple "I owe you" note comes to mind. You lend your money and they'll pay you it back, plus some extra for letting them use it as interest.
Here's what we have lined up to help you with this guide: breaking down what bonds are, how they work, why people invest in them, and the pros and cons. If you are a beginner in the world of investing or looking to diversify your po