From the course: Managing Your Personal Investments

Unlock the full course today

Join today to access over 22,600 courses taught by industry experts or purchase this course individually.

Utilizing bonds in your portfolio

Utilizing bonds in your portfolio

From the course: Managing Your Personal Investments

Start my 1-month free trial

Utilizing bonds in your portfolio

“

- How would you feel if I told you the only way you could buy a house was it if you paid for it entirely in cash? It's hard to imagine, right? And that's why loans exist. Loans make big, important purchases possible. This is essentially what a bond is, a loan that you make to a company or government, so they can finance large projects. In order to do this, they issue you bonds. Government issue bonds which are also called government notes or bills, are considered quite safe. Cities, States, and federal governments all issue bonds. With rare exceptions, governments always pay back their bonds. When a government fails to pay its bond, which is called a sovereign default, its impact to world markets is quite severe, so it is avoided at all costs. Some government bonds are also tax-free. So if you fall into a high tax bracket, a tax free bond can be used as a way to earn income without having to pay tax on the interest.…

Contents