BONDS 101 // One way to protect yourself from a market crash is by holding some bonds in your portfolio. Find out why bonds are considered a “safe haven” asset, and for a beginner-friendly tutorial if you know nothing about bonds.

I’ll talk about what a bond is, how to choose bonds to invest in, and finally, I’ll go over some specific ways you can invest in bonds for your own portfolio. With zero jargon or financial gibberish!

***ATTENTION: I have a new Instagram and TikTok handle @itsrosehan ***
That’s my official account, and I will NEVER message you about investment schemes, so please be careful and block & report any scammers posing as me.

__________

***FREE DOWNLOAD: FIDELITY INDEX FUNDS CHEATSHEET
A simple cheat sheet to help you pick the best stock and bond index funds.

__________

***BOOKS I RECOMMEND 📚***

I Will Teach You to Be Rich (hilarious how-to book on personal finance for millennials)

The Little Book of Common Sense Investing (Jack Bogle’s classic advice on index funds)

InvestED (step-by-step, millennial-friendly advice on how to pick stocks like Warren Buffett)

Unshakeable (this book = courage. blast ALL the fears & misconceptions you have about investing)

Rich Dad Poor Dad (#1 selling personal finance book of all time… need I say more?)

Think and Grow Rich (the ultimate book on money mindset and wealth consciousness)

________

***MY FAVORITE MONEY TOOLS 🖤***

YNAB (I literally can’t live without this budgeting app, so obsessed)

Wise (like Venmo but for international currencies – I use this app a LOT for my life in Mexico)

Ledger Nano S (crypto storage hardware wallet, because “Not Your Keys, Not Your Crypto”!):

__________

DISCLAIMERS & DISCLOSURES ❤

This content is for education and entertainment purposes only. Rose does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

This description contains affiliate links that allow you to find the items mentioned in this video and support the channel at no cost to you. Investing With Rose is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Thank you for your support!

__________

SAY HI ON SOCIAL! 👋🏼
Website:
Instagram:
TikTok:
Pinterest:

…(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERT IRA TO GOLD: Gold IRA Account

CONVERT IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Bonds 101: A Detailed Explanation for Beginners

Investing can be an intimidating concept, especially for beginners who may not fully understand the various options available. Bonds are one such investment avenue that provides a stable income stream and capital preservation. In this article, we will delve into the world of bonds and provide a comprehensive overview for beginners starting their investment journey.

What are Bonds?
At its core, a bond is a debt instrument issued by governments, municipalities, corporations, or other entities to raise capital. When you invest in a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of your principal amount at maturity.

Key Terminology:
1. Issuer: The entity that issues the bond (government, municipal, or corporate).
2. Principal: The initial amount of money you lend by purchasing a bond.
3. Coupon Rate: The fixed interest rate paid to the bondholder.
4. Maturity: The predetermined date when the issuer repays the principal amount.
5. Yield: The annualized return on investment, taking into account the bond’s price and interest received.

Types of Bonds:
There are several types of bonds, each catering to different investment goals and risk tolerances. Here are three common types:

1. Government Bonds: Issued by national governments, such bonds are considered the safest option as they are backed by the respective governments. Examples include U.S. Treasury bonds, U.K. gilts, and German bunds.

2. Municipal Bonds: Issued by local governments or municipalities to fund public projects like schools, hospitals, or infrastructure. These bonds offer tax advantages for investors, especially if you reside in the same state or municipality where they are issued.

3. Corporate Bonds: Issued by companies to raise capital for business operations or expansion. Corporate bonds offer varying levels of risk, with higher-yielding bonds usually indicating a higher risk of default.

Benefits of Bonds:
1. Steady Income: Bonds typically provide a fixed, regular income stream through periodic interest payments, making them attractive for income-oriented investors.

2. Capital Preservation: Bonds offer a higher degree of principal stability compared to other investments like stocks. As an investor, you can feel secure knowing that the issuer has a legal obligation to repay the principal amount at maturity.

3. Diversification: Bonds can help diversify your investment portfolio, reducing risk by spreading your investments across different asset classes.

Risks associated with Bonds:
1. Interest Rate Risk: When prevailing interest rates rise, the value of existing bonds decreases, as newly issued bonds begin to offer higher yields. This can result in capital losses if the bond is sold before maturity.

2. Credit Risk: There is a possibility that the issuer may default, particularly with corporate bonds. It is essential to evaluate the creditworthiness of the bond issuer before investing.

3. Inflation Risk: Bonds fixed interest payments may not keep pace with inflation, resulting in a decrease in purchasing power over time.

How to Buy and Sell Bonds:
Investors can buy and sell bonds through various channels, including brokerage accounts, banks, or online platforms. It is crucial to consider factors such as bond prices, yields, and maturity dates when making purchasing decisions.

In Conclusion:
Bonds are an essential component of a balanced investment portfolio, providing income and capital preservation. Beginners can benefit from understanding the basics of different bond types, risks, and returns. As with any investment, it is advisable to seek professional advice and conduct thorough research before diving into the bond market.