Well, lots of people are interested in investing, here I will recommend a very effective and useful to make your choice, and hopefully, get some benefits from this.

Bond investments

You may have heard words like "bond market," "bond market rise," and "bond prices generally fall" from the media. Maybe you know friends who have bought bonds, and maybe you are still wondering what bonds are.

A bond, as it's called, is actually an IOU, a beautiful piece of paper printed with dollar value and artistic images, but basically, an IOU written at dinner, a record of how much money you lend to others. Most show the amount borrowed and the date of repayment. Also, indicate the interest paid by the borrower on the payment.

Holding bonds will also have risks.

First, if you sell bonds before the maturity date, you may not be able to recover the principal in full because, like the stock market, it will rise and fall disorderly every day.

Second, when the bond issuer fails and cannot repay the principal, this possibility depends on the bond issuer. For example, the U.S. government will not fail, and it can choose to print more money when necessary. Therefore, holders of dollar government bonds generally do not face the risk of losing principal, but other bond issuers, such as hospitals, airports, and enterprises, will not be able to guarantee 100%. If they fail, Holders will suffer losses, but usually, they will not be unlucky enough to pull anything back and always get some principal back. But in extreme cases, investors will lose all their money with interest.

When bond issuers fail to repay interest and principal on time, this is called default. In order to avoid default, smart investors usually know the issuer's financial situation before buying. Some bonds are guaranteed by third-party guarantees, which is also a guarantee. Some institutions in the market rate bonds so that investors can know in advance which bonds are high risk and which are low risk. Large companies generally receive higher credit ratings, such as McDonald's, which has a near zero chance of default on bonds, and smaller companies with maternal difficulties, which generally have lower credit ratings.

If you buy junk bonds, you risk not getting back the principal, which is why the coupon rate of junk bonds is higher than that of ordinary colored lead because investors need high returns to cope with high risks. In addition to the junk play in junk bonds, the possibility of default in general junk bonds is still low.

In fact, the biggest risk of holding bonds is inflation. We have seen how inflation erodes an investment. If we invest in stocks, we can resist inflation and achieve certain profits in the long run. If we invest in bonds, it is difficult to achieve this.

You see, it's a really good way to invest your fund and make some profits. If you truly want to make this kind of investment, you'd better know more about the disadvantages and advantages.

（Writer：Ganny）