Bonds are often preferred by buy-and-hold investors or those getting close to retirement, who value relative safety and price stability and are content with lower returns than what stocks may offer over the long term. Bonds also serve as a key component of the investment portfolios of pension funds and life insurance providers, among others.

Some bonds are indexed to the consumer price index (CPI) and can be used as a hedge against inflation. For example, the Treasury Inflation-Protected Securities (TIPS) issued by the US Treasury are linked to US inflation. Similar products exist in the UK, Canada, India, Italy and Hungary, among many other countries.

For the actual process of buying bonds, please refer to our article “How to buy bonds?”

What else do you need to know about bonds?

Want to learn more before deciding what’s your optimal bond allocation? You might want to check out these other articles to deepen your knowledge.

 

 

Author of this article

Gergely Korpos

Author of this article

Gergely is the co-founder and CPO of BrokerChooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Gergely Korpos

Co-founder, CPO

Gergely is the co-founder and CPO of BrokerChooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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