NYC / Philadelphia Financial Planning Firm Explains Why Bonds Are a Good Portfolio Investment
Bonds. Hmmm. Doesn’t have quite the same built-in excitement as talking about stocks, does it? But here’s the thing: that’s the whole point. Bonds are your old standbys, your trusty friends. Bonds have got your back when the stock market turns volatile.
Don’t get us wrong; investing in bonds alone won’t typically bring your best return on investment. Our NYC and Philadelphia financial planning advisors are here to help you create a diverse portfolio of stocks and bonds so you have both stability and profitability in your long-term wealth planning strategy.
Bond. James Bond.
Just like the famous superspy, bonds work behind the scenes to further your interests even when the world is in peril. Here’s how they work.
Individual bonds start off with a set value — the investment or purchase price that you pay when you first acquire them. Then, they accrue interest over time. In other words, even if the stock market is throwing a temper tantrum, your bonds keep earning you money. Bonds also have a set maturity date, which means at some point in the future, you will get your money back.
You may also want to talk to your wealth management advisor about when they recommend selling bonds, at times when they are experiencing the highest profitability. Buying low and selling high is always a good thing, and a professional financial planner can help you coordinate bond sales at just the right moment to ensure maximum yield.
In short? Bonds…
- Add income
- Increase portfolio diversification
- Lower volatility risk