Investing in Bonds
A bond is a debt security that allows you to loan money in exchange for a specified rate of interest during the life of the bond. According to some investors, bonds are safe components of any portfolio because they provide stability and certainty that stocks cannot offer.
Types of Bonds
There are two different types of bonds that you can invest in:
- Corporate bond – This is the debt security issued by both private and public corporations. An experienced firm providing investment management in Washington, DC and Northern Virginia, AOG Wealth Management recommends that you make sure that the company’s financial statements are in good shape.
- Individual bond – You can invest in individual bonds through mutual funds or Exchange Traded Funds (ETFs). They are a collection of bonds that differ in maturities. They are similar to stocks in a way that there is an actual and constantly changing price. Individual bonds can focus on corporate or government debt, short or long-term bonds, or both.
Reasons to Invest in Bonds
Including bonds in your asset management plan in Washington, DC , is an ideal way to preserve capital and earn a predictable return. Bonds have less volatility because the prices fluctuate less when compared with stock prices. They can also offer guaranteed returns on investment, depending on how you invested.
Knowing that you have stable returns makes it easier to plan for your future expenses and/or savings. Keep in mind that bonds will pay you a certain amount per year, so you can set your targets according to your estimated return on investment.
You can also potentially profit from bonds in two ways: interest and capital gains. Aside from collecting interest from bonds, you can also profit by selling them at a higher price compared with the original market value.
Let AOG Wealth Management help you invest in any type of bonds. As the leading advisor in providing asset management in Great Falls, VA and investment management services as well, we can find a solution that will meet your needs. We distinguish ourselves by using a durable income model that incorporates bonds, stocks, commercial real estate, and more.
To learn more about bond investing, call us today at (866) 993-0203. You can also schedule a free consultation when you fill out our contact form.
Bond purchasers have committed to receiving a fixed rate of return for a fixed period and assume a number of risks including reinvestment risk, inflation risk, market risk and timing risk. The balance between risk and return varies by the type of investment, the entity that issues it, the state of the economy and the cycle of the securities markets.