Bonds can show incredibly valuable to anyone concerned about capital preservation and earnings generation. Bonds also may assist partially offset the danger that comes with equity investing and typically are suggested as part of a varied portfolio. They can be used to achieve a range of investment objectives. Bonds hold opportunity however, like all investments, they also carry threat.The primary difference between these 2 methods of buying bonds likewise is necessary to understand: When you buy a specific bond and hold it to "maturity," you won't lose your principal unless the bond provider defaults. When you purchase a bond fund, however, the value of your financial investment fluctuates everyday your principal is at risk.