Why You Should Add Bonds to Your Portfolio

When it comes to putting together a portfolio that is both balanced and profitable, investors have to consider a host of different investment products. This is especially important in the current economy, as the markets have become more volatile and it’s getting even harder to make sure that your portfolio is protected from risk. One of the most important parts of any good investment plan is the use of bonds. Smart investors purchase these bonds to shield themselves from risk and add growth potential on the short term.

Bonds are different from many of the other investment options because they are guaranteed. Even the best stock and mutual funds have a chance of failing and in the current economy, this is not a chance you should be taking. Many people have put their hard earned dollars into stocks that seemed like a sure bet, only to see the stock tank a few months later. Sharp, shrewd investors will put at least a chunk of their investment dollars into bonds, because these items don’t have risk and they can provide some peace of mind.

Right now, certainty is something that comes at a premium. There are many unsure investment products out on the market, so it helps if you can invest in products that give you a guaranteed return amount at a guaranteed time. Bonds are nice because they allow you to plan for the future. You know exactly when you will be able to cash in these bonds and re-invest your returns in something new. With stocks, mutual funds, and other investment ventures, you don’t know what you are going to have and you don’t know when the best time to withdraw the money might be. Bonds give you certainty and this is something that you have to value given the volatility of the current economy.

Ultimately, bonds provide the type of surety and security that people must have in their portfolio. The best investors balance this with some products that carry more risk and provide more reward.

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