Why invest in bonds? As an investor, you have multiple asset classes you can put your money into

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Why invest in bonds? As an investor, you have multiple asset classes you can put your money into. For example, you can invest in commodities, equities, and cryptocurrencies. Still, there are a number of reasons you should consider investing in bonds. Source of fixed income: Bonds are ideal sources of fixed income. This means that if you decide to hold the debt to maturity, you will always receive a coupon at periodic intervals.


Safe investments: Bonds are said to be safer than other securities. Governments are said to be almost impossible to go bankrupt. Bonds are liquid: If you don’t want to hold the bond to maturity, you can exit at any time at a south africa business email list profit. This is because bonds are usually traded in the public market. Bonds are legally protected: If you are an equity holder of a company and it goes bankrupt, you end up losing everything.


If you are a bond holder, you will get some money when the company’s assets are auctioned. Great for hedging: When there are increased risks in the market, investors turn to bonds, which are frequently said to be safe havens. Therefore, if you believe that the economy will fall or experience risk, you can allocate some of your money to bonds. However, a major problem associated with bonds is that their returns are often smaller than equities.