| In these tough economic times it is hard for you | | | | since they can be bought easily and sold in smaller |
| to trust a particular type of investment. Luckily, | | | | units. It is not easy to buy bonds and hold them |
| mutual bonds offer some sort of shelter during | | | | since they are not as liquid as bond funds. |
| these times and give you a chance to still make | | | | There are many different types of bond funds. |
| money. However, it is advisable that you take | | | | The government bond funds invest in debt |
| your time when you are choosing the type of | | | | securities that are offered by the government |
| mutual fund that will work well for you. Investing | | | | such as treasury bills, treasury bonds, treasury |
| in bonds is a good idea and this ensures constant | | | | notes etc. Then there are the municipal bond |
| interest payments and possible capital appreciation | | | | funds that invest in securities issued by the state |
| when the bond prices increase. | | | | and/or local governments for doing public works |
| Bond mutual funds help you achieve this and | | | | like building bridges, constructing schools etc. |
| much more. The middle risk investment venture | | | | Some of these are exempt from federal taxes |
| that pursue strategies that are supposed to give | | | | since they have the backing of the federal |
| higher returns. Investing in bonds and debt | | | | government. The corporate bond funds invest in |
| securities is less risky than stocks. They also | | | | debt securities of corporations. They are a bit |
| provide the stability that many investors are | | | | more risky than the other two types as they are |
| looking for and since they are diversified, there is | | | | not backed by the government. Despite this, they |
| the reduced risk of default. In addition some bond | | | | pay out a higher income in comparison to |
| mutual funds are also federal or state tax | | | | government funds. |
| exempt. They are also more liquid than bonds | | | | |