Thursday, 18 January 2018
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Investing in Bonds

The present global economic scenario reflects a trend where the richest has it all. This has led to the proliferation of many brokers and banks, which guide you on how you can make your money work and earn rich dividends. The free market economy promotes a "winners take it all" environment. As a result, it has become utterly critical for all of us to invest some portion of our income in bonds and earn some more bucks. A host of financial services are also on offer by different investment gurus who help you decide the right move at the right time when investing in bonds.

A recent media report also disclosed how tax-free bonds have emerged as a boon for retail investors. This has increased global cash flow as more and more people are getting initiated in the process of investing in tax-free bonds. The new policy measures have created a favorable climate for investors who are eager to save money by investing in bonds. Usually floated by big corporate houses, bonds are essentially flexible kinds of financial instrument, which can be purchased by any one provided company that they will repay the money borrowed by selling the bonds with interest on a specified date.

Unlike mutual funds or shares, bonds are usually risk-free in nature, and guarantee greater returns to the company. The regular income from bonds will make you augment your income at a much faster rate, unlike other investments. In order to raise funds at a large-scale large corporate houses use bonds as a money-augmenting tool.

Some of the bonds, which are quite popular among clients, are as follows-

Municipal Bonds-Municipal bonds are generally known as 'munis'. They signify the bonds, which have been issued by municipal corporations. Municipal bonds empower the holder to claim tax exemption.

Corporate Bonds-Corporate giants float corporate bonds. However, these bonds carry a risk factor no matter how big the corporate house is.

Government Bonds-The concerned government authority, to raise funds generally issues government bonds. They are also risk free in nature. They also provide one with tax exemptions.

Saving Bonds-The government also issues savings bonds. A major advantage of this bond is one can easily get tax exemptions by investing in these bonds. Features of mutual bonds-It is very important to understand the features of a particular bond you are investing in. Maturity period, purchase price and financial constraints also ruling factors, which must be taken into account while investing in mutual bonds.

Bonds, are unduly a valuable form of investment. It is always advisable to invest in stock bonds, as they are comparatively risk-free in nature in comparison to other bonds.

Learning the routes of investment will become all the more easier if you are ready to keep an open mind and get out of your traditional way of thinking. The current economic scenario provides all the raw materials to become richer by investing in bonds, only if you are ready to make hay while sun shines!


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