December 22, 2006, Newsletter Issue #46: Bond Investing Basics
Tip of the Week
Learn the bond investing basics before jumping into the bond market.
When you buy a bond from the government, a company or another organization, you are loaning your money to that organization in return for a fixed interest rate. Unless the organization goes bankrupt, you will be paid that interest rate at predetermined periods during the life of the bond.
Bonds are a good place to invest money that you will need within the next few years. They have a lower yield than stocks, but are also much less risky. If you are saving up for a home or are planning on retiring soon, more of your investments should be in bonds than in stocks.
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