Bonds can prove extremely useful to anybody concerned about capital preservation and income generation. Bonds likewise might help partly balanced out the threat that includes equity investing and typically are advised as part of a varied portfolio. They can be used to achieve a variety of investment goals. Bonds hold chance but, like all investments, they also bring threat.The main difference in between these 2 ways of purchasing bonds also is necessary to understand: When you invest in a private bond and hold it to "maturity," you will not lose your principal unless the bond issuer defaults. When you purchase a bond fund, however, the value of your financial investment fluctuates day-to-day your principal is at danger.