Buying Bonds vs Buying Bond Funds

Buying Bonds vs Buying Bond Funds

Stock markets tend to be pretty good at keeping investors up at night.  Peaks, troughs, business cycles, corrections, and crashes are par for the course when investing in stocks.  And for many investors this is just a little too much excitement.

For anyone uncomfortable with the risk of investing in stocks, bonds are often the first alternative. They won’t nock knock your socks off with huge returns, but bonds can provide steady income with less risk that your portfolio sours.

But when it comes to buying bonds, investors have a big choice to make: do you buy individual bonds or bond funds.

Unlike stocks, the choice between buying individual securities or a fund that includes individual securities has major implications.

Here’s a quick guide that explains what you need to know.

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4 Telltale Signs You're in the Wrong Investments

4 Telltale Signs You’re in the Wrong Investments

Investing is kind of like buying new shoes.

There are a thousands of options out there: running shoes, hiking shoes, dress shoes, and flip flops just to name a few.  The right pair for you will depend on what you need them for, how big your foot is, and how much you want to spend.

There are thousands of options in the investment world too, from individual stocks and bonds, to mutual funds and ETFs, to managed accounts and automated platforms.

One question I hear a fair amount is, “with all the options out there, how do I know if my portfolio is right for me?”

Much like buying a new pair of shoes, the right portfolio for you matches your needs.

If you need new shoes to take your dog for a walk around the block twice a day, you probably won’t go out and buy ski boots.  The same idea applies when investing.

 

4 Telltale Signs You’re in the Wrong Investments:

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