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					Investing in Bonds

When it comes to planning your financial retirement many people focus on
the different types of accounts that you can use in which to defer
payments or avoid taxes for a little while but very few people discuss in
depth the specific things in which you can invest those funds that you
have so carefully squirreled away for the important day that is to come
in the dark dank future that seems as though it will never arrive.

Bonds are not your typical high risk-high yield investment but they are
very likely to earn a return for you. If you are not in dire straights
for retirement funds this is a slow and steady way to build a decent
retirement for yourself over time. If you are in the final hour this is
an investment strategy that might be more than slightly too timid for
your specific needs. There are other more investment strategies that will
be discussed elsewhere.

There are essentially three different types of bonds: corporate,
municipal, and government.

Corporations trying to raise funds for ventures such as building new
facilities or launching new product lines typically issue corporate
bonds. The interest on these bonds is taxable. As a result these bonds
tend to pay higher and are better retirement investment options than
government or municipal bonds.

I have said before and will continue to say that there are no sure things
when it comes to investing. While many bonds tend to be safer than some
of the other investments on the surface there are significant risks
involved when investing in bonds that would be negligent to overlook.
Where you find the risks of market ups and downs when investing in
stocks, mutual funds, and options the risk is that yours may lose value.
When it comes to bonds the risks include the following: default, changes
in the interest rate, and inflation. The risks for some are far weightier
than the benefits of a slow and 'steady' investment.

You should really carefully consider whether or not bond investing is a
good idea of your retirement needs along with your nerves. We weren't all
born with nerves of steal, for this reason it is probably a good idea to
carefully decide whether or not you are comfortable with the risks that
bonds introduce into your investment picture.

I always recommend that you take the time to discuss your plans and goals
with a financial planner before taking the plunge and making any major
financial decisions whether they concern your retirement or your child's
college fund. These all affect your future and the security you can
provide your family when the time comes. A good financial advisor can
help you weigh the pros and cons of investing in bonds and help you
decide whether or not the potential payout on these bonds is worth the
risks that are involved in the process. This is not the case for
everyone. I tend to be a more cautious investor than most and will think
long and hard before investing on things that I do not consider a
carefully crafted and calculated risk.
Only you can decide whether or not you are comfortable with the idea of
investing in bonds when it comes to your financial retirement hopes and
dreams. I hope you will discuss this with our advisor and carefully
consider the ramifications of this decision.

				
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posted:1/17/2012
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