Bonds can prove very valuable to anyone worried about capital conservation and income generation. Bonds also might assist partially offset the risk that comes with equity investing and often are suggested as part of a diversified portfolio. They can be utilized to achieve a range of investment objectives. Bonds hold chance however, like all financial investments, they likewise carry threat.The main difference between these two methods of purchasing bonds also is necessary to understand: When you buy an individual bond and hold it to "maturity," you won't lose your principal unless the bond provider defaults. When you invest in a mutual fund, nevertheless, the worth of your investment changes everyday your principal is at danger.