Are You Missing The Point Of Bond Investing?
If you take a look at any successful portfolio, you will see a mix of stocks and bonds. While perhaps not as sexy as their equity counterparts, the value and importance of bonds is often overlooked by the rags to riches or in many cases, the riches back to rags story of stocks.
In a nutshell, bond investing involves lending money to a corporation, for a fixed term, and getting a fixed rate of return. This return on your investment is called the coupon rate. The key is in knowing how much of your portfolio should be invested in bonds and how much should be invested in the stock market.