Bonds can prove incredibly useful to anybody worried about capital conservation and earnings generation. Bonds also might help partly balanced out the risk that includes equity investing and frequently are recommended as part of a diversified portfolio. They can be utilized to achieve a variety of financial investment objectives. Bonds hold chance but, like all financial investments, they also carry threat.The main difference in between these 2 ways of investing in bonds also is very important to understand: When you purchase an individual bond and hold it to "maturity," you won't lose your principal unless the bond company defaults. When you buy a bond fund, however, the worth of your investment changes daily your principal is at danger.