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I wish to diversify but I don't understand how bonds are a safer investment if it's prices changes. I understand that bonds are IOUs with interest issued by companies/ governments for borrowing money from us. However, if I do not wish to hold it until maturity, does that mean it's returns are subjected to price changes?
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Joe Lee
24 Feb 2020
Adventurer at Game of Life
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You need a brokerage account and an idea what you are looking for as to bonds. there are many different kinds of bond, some much riskier than others (generally higher yield is correlated with higher risks)
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The idea that bonds are considered a safer investment because their price movement fluctuate less drastically (That also depend on what bonds you buy)
The general belief is that when stock market do badly, bond market will do well & vice versa.
Personally i treat the amount of CPF SA that i hold as my Bond allocation of my investment portfolio.