Bonds can show exceptionally useful to anybody concerned about capital preservation and earnings generation. Bonds also may help partly balanced out the danger that features equity investing and often are advised as part of a diversified portfolio. They can be used to accomplish a range of financial investment objectives. Bonds hold chance but, like all investments, they also carry danger.The main distinction in between these 2 ways of buying bonds also is necessary to comprehend: When you buy an individual bond and hold it to "maturity," you will not lose your principal unless the bond company defaults. When you buy a mutual fund, however, the worth of your financial investment varies daily your principal is at danger.