Bonds can show extremely helpful to anyone worried about capital preservation and earnings generation. Bonds also might assist partly offset the danger that includes equity investing and frequently are recommended as part of a varied portfolio. They can be used to accomplish a variety of investment objectives. Bonds hold opportunity however, like all investments, they likewise carry threat.The main distinction between these 2 ways of buying bonds likewise is necessary to understand: When you invest in a specific bond and hold it to "maturity," you will not lose your principal unless the bond issuer defaults. When you buy a mutual fund, however, the worth of your investment varies everyday your principal is at threat.