Who says bonds are boring? True, bonds don’t offer the cyberthrills
you get from watching stock prices soar and plummet
on your computer screen, but bonds are especially important
for the compulsively thrill-seeking online investor — they
counteract riskier investments and still provide handsome
profits.
You can’t afford to ignore bonds — experts say bonds should
make up at least 30 percent of your portfolio. This chapter
explains how bonds buffer market risk and how to surf the
Web for the ones with the most profit-making potential.
What’s a Bond?
When you buy a bond, you’re not buying a share of a company
— you’re issuing a loan and becoming a creditor of the
company. Because you’re not an owner, you don’t get to vote
or divvy up the profits. But, no matter how badly things go
for the entity, you are entitled to receive your principal and
an agreed-upon rate of return on your investment (as long as
the issuer is solvent).
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