Bonds can show exceptionally practical to anybody worried about capital preservation and income generation. Bonds also may assist partially offset the risk that features equity investing and often are advised as part of a diversified portfolio. They can be utilized to accomplish a range of financial investment objectives. Bonds hold chance but, like all financial investments, they likewise carry threat.The primary difference in between these 2 ways of purchasing bonds also is crucial to comprehend: When you invest in an individual bond and hold it to "maturity," you will not lose your principal unless the bond issuer defaults. When you invest in a bond fund, nevertheless, the worth of your financial investment varies daily your principal is at threat.