In simple terms, bonds are any loan borrowed for a definite period with a fixed interest rate. To give you more idea about bonds, here are five important things you should know:
If you purchase bonds, it makes you a lender. Hence, a bond is treated as a loan. Any corporation or government agency and or organization can sell bonds. Selling bond has a specific return or repay date or also known as maturity date in financial terms. The payment has a fixed interest rate on top of it.
Corporations and government agencies regulate on bonds because it offers the lowest interest rate compared to other lending platforms.
BONDS COME WITH A RISK
Any investment, loan, and business partnership comes with a risk. It works the same with bonds.
Bonds can also constitute a risk of financial loss depending on the loaner. It answers to two main risks such as interest rate risk and credit risk.
BONDS CAN GENERATE BETTER RETURNS
Bonds have lower risks compared to stocks, and over time, they can generate better returns. It is because they have a fixed interest rate compare to stocks. Stocks reflect much on the movement of the market, once down then stocks can be affected.
IT IS GOOD TO INVEST IN A BOND FUND
You can buy bonds the easiest through a bond fund. A bond fund is also mutual funds that are inherently expanded. Many huge companies offer bond funds that you can invest in or purchase – such bonds are short-term, intermediate-term, long-term, domestic bonds, and foreign bonds to name a few.
BONDS ARE BORING BUT CAN BE VERY BENEFICIAL
Bonds could be boring to understand, and some people do not invest much on researching about it. As you age, the more beneficial it is to invest in bonds.
Protecting yourself and getting the financial freedom you want takes a lot of time and hard work. At Bond Pro Insurance Brokers, we work hard in making sure that our clients are well-protected with policies that they can afford. To learn more about how we can help you, please contact our agency at (636) 220-6377 or Click Here to request a free quote.