Bonds can prove incredibly practical to anyone worried about capital preservation and income generation. Bonds likewise might assist partially balanced out the risk that features equity investing and often are advised as part of a varied portfolio. They can be utilized to accomplish a variety of investment goals. Bonds hold opportunity but, like all financial investments, they likewise carry threat.The main distinction in between these two methods of investing in bonds likewise is essential to comprehend: When you invest in an individual bond and hold it to "maturity," you won't lose your principal unless the bond issuer defaults. When you purchase a bond fund, nevertheless, the value of your investment varies everyday your principal is at risk.