|
Investors invest in
bonds because there is stability of income from the coupons, the principal
sum of the loan is preserved and there are also opportunities for capital
gains (due to the tradable nature of bonds). Some investors view shares as
generating higher returns but most acknowledge that bonds are less risky
than shares.
Bonds also yield greater
returns than savings and fixed deposits. In other words, bonds present a
good balance for those too cautious to invest heavily in the share market
but wishing more returns than just keeping their money in the bank.
|
