When Is The Right Time To Invest In Bonds?
With the approach of retirement and the ever volatile economic cycle it’s always a sure fact that a person would want to at least have a soft landing if the pension seizes or the in case of loss of employment. However there are various investment opportunities that have been availed in the market. With stocks being too unpredictable and too risky bonds are now the easiest and safest way of investing your money. Nonetheless with nothing being absolutely risk free there is a lot of worry and concern about when is the appropriate time to invest in bonds.
What is the best bond to invest in? Well this is simple. It depends on the investment portfolio that you have planned for yourself and your individual needs. Having taken in consideration the yield curve of a bond, it’s good to know that at times the safest bet that one can have is to invest in government or council bonds. This is largely due to the low rate of deflection of payment of rates. Thus when there is an opening for a nation project like construction of roads or other social amenities, this is the best time to invest in a bond. This is not to state that other financial companies are not worthy to invest in, they have a higher risk but then reward with higher coupon payment especially a few months to their maturity.
So exactly when is the Right Time to Invest in Bonds
With the ever constant reminder of how the collapse of a private company in 2008 in the US affected the economy of the whole world, making the right choices on when to and how to purchase will give you a pretty good idea of what choices to make
The best time to make an investment nonetheless is when there is high low interest risks on a particular bond even if the price is high. With time, the interest risks of the bond will increase thus increase the value of your investment considerably
Taking into account the various inflation rate and will also help you purchase a great investment opportunity. Taking the yield curve into perspective, it’s a known fact that the prices of the bonds will be lower than any particular tome. Making a commitment to a particular bond at such a time will yield great results especially so if you’re financial advisor agrees.
To be on the safe bet, investing in close end fund system which have limited shares will prove much safer even if the liquidation system is complex. The loss of value of loss of bonds is reduced to the bare minimum
Though not advocated for, junk bonds have been in the recent past giving many people higher rewards, which is when bought near their maturity time and holding on to them till its cashed in However current market stat9istaicas are showing that there is an expected lowering of bond cost in the next two years. This will be the opportune time to invest in bonds especially with the use of the NI card in financial companies and government bonds that view highly their financial obligation to the public, thus employing a buy hold approach in bonds that will give you in higher investment monthly income.