|
Every stock investor should know about bonds.
Bonds are the other side of the investing coin that may help keep your
portfolio afloat in troubled times. A bond is an IOU issued by a
corporation, government, or governmental agency to cover money the
bondholder has lent. If you own stock in a company, you are a part owner of
the company. As a bondholder, you are a creditor. Although less exciting
than stocks, bonds play a critical role in our economy and an important role
in every well-balanced portfolio.
Returns from bonds are generally lower than
stocks; however, they?re a much safer investment. Bonds? safety and
stability act as a counter to the fluctuations common to stocks. Most
investors should have a mix of stocks and bonds in their portfolio. The more
risk you are able and willing to take the higher percentage of stocks in
your portfolio. The more conservative investor will want a higher percentage
of bonds.
|
|
|
