Y 2 invest in Bonds ??

Hi buddies!

I was thinking as to why invest only in bonds when there is share market available for us. But later thought why not have deep insights on the bonds. So here is my article.

Every individual has many dreams. Everybody want to prosper in some or the other way. . A common man tends to have a beautiful home with all amenities, well-studying children, a big car and a retired peaceful life And for progressing there are many ways. And one among them is Bonds. Bonds classically have a predictable stream of payments and repayment of principal; many people invest in them to preserve and increase their capital or to receive dependable interest income. Whatever the purpose may be either saving for their children’s education or a new home, increasing retirement income or any of a number of other financial goals—investing in bonds can help you achieve your objectives.

Many financial advisor's say that Bonds are useful only for retirement plans. But it’s not true. Bonds are useful at every stage of life. Its true at the final stage of life, that is what we call retirement Bonds are real source of stable income. But bonds not only help at the last stage of life but it also helps in the beginning of our life. The traditional fixed benefit plan has been increasing at a rapid speed because these plans are offering greater individual freedom to select any investment options which suits their lifestyle, as a result, giving them the fixed income. Share market is more risky than the Bond Market; never know what happens in the fluctuations. And there is no predictable stream of income. But bonds are useful and helpful too.

Bonds can:

• provide investment stability to help buffer against the volatility of the stock market.
  

• pay a steady stream of income, sometimes tax-free income, which can help with living expenses.
  

• provide high rates of return to grow your capital.
  

• Play different roles at different points in your life to help you achieve your financial goals.
  

In the present scenario, the European Government bonds has advanced to the third day too. Europe’s Benchmark which was down from near the highest in almost five years was helped by a Worldwide rally in Bond Market only after the Bear Stearns Co/- offered 3.$2 billion to bail out a hedge fund. And to compound the European Bond rally, there are concerns that the U.S property market and the sub prime loans remain the hot topic by which the European Bonds will be rallying for more two to three days.

In my opinion, investing in bonds is comparatively safer than stocks, but less yielding than them. And I think that the European bond market would rally for next 3 days because since the U.S property market is not doing well.