To help finance my vacation to Barbados for the Christmas holidays I decided to invest in One Year Investment Bonds. These are issued by the US Federal Government, which is considered to be the most reliable borrower in the world. There has never been an instance where the US government has defaulted on a loan. It would take a disaster of catastrophic proportions for the US government to become bankrupt.

After making the decision to invest in bonds I determined how much of my overall portfolio that I wanted to devote to individual bonds. I then contacted several stock brokers to help me choose the best bonds to invest in. while at the stockbrokers I was advised to diversify my investment portfolio so as to spread the risks, or not putting my eggs in one basket. I even gathered more information by reading the Wall Street Journal. I was further advised by my stockbroker to consider using bond funds as opposed to individual bonds. This was because my investment fund was limited. These bond funds are a collection of many individual’s funds and are more diversified than individual bonds.

The bonds that I invested in had a coupon rate of 5%. For instance for a bond of $1000 par value I will get $50 per year. This will be in two semi-annual payments of $25. Another way to look at it is by dividing $50 by $1000 and you get 5%. I decided to invest in these bonds because they had performed well as compared to others in their category. I am now looking forward to a great holiday with my family in Barbados.