12 Answers: Is investing in bonds a good idea?
I am wondering if I should put a percentage of my money in bonds and therefore earn a better return on investment compared to just keeping it in the bank.
Do you think that investing in bonds in this market is a good idea? Is it risky?
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Answers ( 12 )
Hi Mary, usually I invest in real estate however when we have a lot of money to invest, or just a little bit, a great market is in the bond market.
So the bond market is basically when you’re buying debt.
So when people buy a bond for instance it sort of backs as a big loan.
So this allows companies to do things like make improvements and for governments to build new roads and things like that.
Well when they pay back the principal and interest that’s when investors get their recurring revenue.
So you’re basically investing in debt.
So just a couple of things about the bond market.
We have seen ratings agencies in the past commit fraud by giving bonds amazing ratings when they have no value.
Also bonds will contribute to a market crash when they can be paid.
So bonds are bought up and then the interest and the principal payments stop coming then that forms a bubble and a market crash.
So bonds is one of the markets that we have that are tradable and there are many more than that.
Yet there are many different instruments we can use to speculate in these markets.
Bonds can be a safe bet, they tend to be less volatile as compared to stocks and what is more there are certain bonds which can be very safe. For example t bonds which are government issued bonds for the treasury servicing the national debt, well these are very unlikely to default and while it is only about 2 or 3% it is still pretty good a return especially as they can be in their for as little as 28 days.
@Dan Black agreed. Less volatility, and smoother than stocks. Not as much growth though and prefer to pick stocks personally.
t bills are probably your safest investment right now, so yes.
Investing in bonds is the most safe idea, so YES!
I know people who have only ever invested in bonds and are very very rich. So yes bonds are often a good investment to make and many times when stocks go down bonds go up so they can hedge your investments.
Government t bonds are the go to place when the market gets rocky like it is today
gov bonds are low now too
Always diversify your portfolio with some bonds.
Carry some of your portfolio invested in bonds even just diversify and because when stocks go down bonds go up
I am beginning to invest in certain bonds to protect my earnings made in stocks over the last few years
Bonds are like a box of chocolates, you never know what you’re gonna get… Just kidding 😉 Be sure to choose safe bonds and stay away from high yield “junk bonds”.
I have had some experience with bonds and overall I have made money with them but some defaulted and were total losers.