Many personal financial advisors recommend
that investors maintain a diversified investment portfolio
consisting of bonds, stocks and cash in varying percentages,
depending upon individual circumstances and objectives. Because
bonds typically have a predictable stream of payments and
repayment of principal, many people invest in them to preserve and
increase their capital or to receive dependable interest income.
Whatever the purpose—saving for your children’s college education
or a new home, increasing retirement income or any of a number of
other financial goals—investing in bonds can help you achieve your
That’s especially true for retirement
planning. During the past decade, the traditional fixed-benefit
retirement plans have increasingly been replaced by defined
contribution programs, such as 401(k) plans. Because these plans
offer greater individual freedom in selecting from a range of
investment options, investors must be increasingly self-reliant in
securing their retirement lifestyles.
The diversity of fixed-income securities
presents investors with a wide variety of choices to tailor
investments to their individual financial objectives. Whatever
your goals, your investment advisor can help explain the numerous
investment options available to help you reach them, taking into
account your income needs and tolerance for risk.