Bonds can prove extremely helpful to anybody worried about capital preservation and income generation. Bonds likewise might assist partly balanced out the danger that features equity investing and frequently are advised as part of a diversified portfolio. They can be used to achieve a range of financial investment objectives. Bonds hold chance however, like all investments, they also carry threat.The main difference between these two methods of investing in bonds likewise is very important to comprehend: When you invest in an individual bond and hold it to "maturity," you will not lose your principal unless the bond company defaults. When you invest in a mutual fund, nevertheless, the worth of your financial investment fluctuates day-to-day your principal is at threat.