Jack Bogle: How to invest in bonds successfully

Credit: Finance Jane

Bonds – also known as fixed income instruments – are used by governments or companies to raise money by borrowing from investors.

Bonds are typically issued to raise funds for specific projects. In return, the bond issuer promises to pay back the investment, with interest, over a certain period of time.

One advantage of buying bonds is that they’re a relatively safe investment. Bond values don’t tend to fluctuate as much as stock prices.

Another benefit of bonds is that they offer a predictable income stream, paying you a fixed amount of interest twice a year.

You have a few options on where to buy them: From a broker: You can buy bonds from an online broker. You’ll be buying from other investors looking to sell.

You may also be able to receive a discount off the bond’s face value by buying a bond directly from the underwriting investment bank in an initial bond offering.

You can also invest in bond funds. It’s important to remember that bond funds buy and sell securities frequently, and rarely hold bonds to maturity.

That means you can lose some or all of your initial investment in a bond fund.

In this video, Jack Bogle talked about how to invest in bonds effectively. He gave some tips and discussed his own experience.

Warning: This video is to show you John Bogle’s view about how to invest in bonds. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.

Source: Finance Jane (Shared via CC-BY)