2^nd part of a 5 part investment special! This week is bonds… A bond is simple a debt security in which the issuer of the bond borrows money and is obligated to pay the holder back at a later date (of course plus interest). This type of investment is very secure and safe and because of that it lower return on investment. There are many different types of bonds, junk, government, fixed, floating, the list goes on forever. I personally think that bonds are a great investment strategy especially in times of speculation and turbulent stock market. By investing in bonds you again diversify your finances, further protecting your precious eggs.

Although bond’s are really just glorified I.O.U’s they are not 100% fail proof, sometimes you do not get your money back, sometimes you do not get the return on them that you expected and planned. IF you need even more security in your investment then perhaps CD’s are what you are looking for.

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• Investing - Stock
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1. Jack Payne, February 22, 2008:

   The area of bond investing I never see discussed is U.S. Gov’t interest-free bonds. Cap gains offer the only route to value increase. These are sizeable opportunities. I wonder why they never seem to get any attention.

2. Craig, March 13, 2008:

   US Gov Interest free bonds typically have a lower interest, so it is very situational if it is actually beneficial to go that route