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 defe r payments or avoid taxes for a little while but very few people disc uss 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 neve r 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 r etirement 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 y our specific needs. There are other more investment strategies that wil l be discussed elsewhere. There are essentially three different types of bonds: corporate, muni cipal, and government. Corporations trying to raise funds for ventures such as building new facilities or launching new product lines typically issue corporate b onds. 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 th ings when it comes to investing. While many bonds tend to be safer th an some of the other investments on the surface there are significant risks involved when investing in bonds that would be negligent to ov erlook. Where you find the risks of market ups and downs when investi ng in stocks, mutual funds, and options the risk is that yours may lo se value. When it comes to bonds the risks include the following: def ault, 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 g oals with a financial planner before taking the plunge and making any major financial decisions whether they concern your retirement or yo ur child's college fund. These all affect your future and the securit y you can provide your family when the time comes. A good financial a dvisor can help you weigh the pros and cons of investing in bonds and
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help you decide whether or not the potential payout on these bonds i s worth the risks that are involved in the process. This is not the c ase 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 co nsider 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 hope s and dreams. I hope you will discuss this with our advisor and caref ully consider the ramifications of this decision. PPPPP 567
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