Every stock investor should learn more about bonds than any other individuals. Bonds are the other side of the investing coin that may help keep one’s portfolio buoyant in distressed times.

A bond is an IOU issued by a corporation, government, or governmental agency to cover money the bondholder has lent. Simply, if you are a stockholder, you are a part owner of the company. A bondholder, on the other hand, is deemed the creditor.

Investing in bonds, though less stimulating than stock investing, play crucial role in the country’s economy. It also plays a pivotal role in balancing the investor’s portfolio. Returns from bonds are generally lower than stocks. But they are a much safer form of investment.

Most investors should have a mix of stocks and bonds in their portfolio. The greater risk you are able and willing to take the higher percentage of stocks in your portfolio. Learn more about the basic concepts of bonds like the par value (face or principal value), coupon (interest rate) and their maturity (due date) to make yourself an expert in the field.

This entry was posted on Wednesday, May 30th, 2007 at 1:37 am and is filed under Income / Retirement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.