Let’s face it! People are often keen on investing in the stock market, but the market fluctuations and risks involved deter most of them. This is where bonds shine! For people who have a conservative outlook about the stock market and don’t want any of the associated risks, you can always invest in bonds.
For those who are not very acquainted with bonds, these are debt instruments in which investors lend money to the government or large corporations and, in return, receive periodic interest. This interest can be monthly, quarterly, semi-annual, or even annual, with the return of the principal upon maturity.
How do bonds work & what differentiates them from stocks?
How is it any different from stocks? Well, when you reach out to a professional bond advisory service in Kolkata, they’ll help you understand that, unlike stocks, bonds offer a predictable income stream and are a much safer investment option. They are great for people/ investors who seek stability, looking to diversify their portfolio, and are in search of safer investments.
Wondering how bonds work? To put it simply, governments and organisations issue bonds to raise funds - mainly to fund certain projects/ operations. Investors invest in these depending on their risk tolerance, duration, and yield. That said, understanding bonds is crucial to generating steady income over time, and that’s where bond advisors come to the rescue!
How to invest in bonds?
There are two ways to invest in bonds - buying individual bonds and buying bond funds.
The former is exactly what its name implies, where you, as an investor, purchase individual bonds, which in turn allows you to get a better grasp of the exact holdings. This also allows people to get a deeper and thorough understanding of the risks and returns associated with their investments.
However, if you consult the right bond advisory service in Kolkata, they’d also mention a few drawbacks to this.
Unless you possess a large sum of money or have connections with an institutional dealer, your exposure to the different types of bonds that you can actually buy, such as Treasury bonds, may be somewhat limited.
Even if you do have access to an institutional dealer and possess lots of money, it may still be a time-consuming process to manage individual bond positions.
This brings us to buying bond funds.
Investors can buy bond funds either through mutual funds or through exchange-traded funds, popularly referred to as ETFs. It allows people to spread their investments across numerous securities in a single investment vehicle, thus allowing greater diversification. There are many different types of ETFs and bond mutual funds available to people. Investors can go for them depending on credit quality, interest rate sensitivity, and more - something that’s not quite available easily when investing in individual bonds due to the costs associated.
Why connect with a bond advisory service in Kolkata?
Bonds offer a great opportunity for people/ investors looking for a passive income opportunity, minus the constant hassle of monitoring the stock market. That said, navigating the bond market can be complex, especially in India, where the options range from government bonds to corporate and tax-saving bonds. This is why you need to reach out to a trusted bond advisory service - so that you can make informed decisions and work towards achieving your financial goals.
At Call Andii, we are committed to helping you make the right investment choice. We have years of experience in the banking and investment sector, and thus provide tailored bond advisory service in Kolkata, helping you maximise returns. Let our experts work with you in building a portfolio that offers stability and consistent growth. Connect now!