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Hariz Arthur Maloy
09 Jun 2020
Independent Financial Advisor at Promiseland Independent
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Hello! One of the pros for buying investment grade bonds is that it is less riskier than equity. As a result, the downside is that your return might be lower relative to putting your money in the equity market.
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Singapore has a strong bond market with almost no tax considerations on income from bonds.
Buying bonds across credit quality will provide you with guaranteed capital when held to maturity and guaranteed income. Lower risk than equity based asset classes or property, bonds allow you to hedge against market volatility.
However with interest rates at near 0 levels, new bonds are less attractive both in yields and also if you're planning to sell them in the future as interest rates may rise and your bond prices fall in relation to it.