Bonds can show exceptionally practical to anybody worried about capital conservation and earnings generation. Bonds also may help partially offset the risk that features equity investing and typically are recommended as part of a varied portfolio. They can be utilized to accomplish a range of financial investment objectives. Bonds hold opportunity but, like all investments, they also bring risk.The primary difference between these 2 ways of purchasing bonds also is very important to comprehend: When you purchase a private bond and hold it to "maturity," you will not lose your principal unless the bond issuer defaults. When you buy a bond fund, nevertheless, the value of your investment changes day-to-day your principal is at risk.