Stock markets tend to be pretty good at keeping investors up at night. Peaks, troughs, business cycles, corrections, and crashes are par for the course when investing in stocks. And for many investors this is just a little too much excitement.
For anyone uncomfortable with the risk of investing in stocks, bonds are often the first alternative. They won’t nock knock your socks off with huge returns, but bonds can provide steady income with less risk that your portfolio sours.
But when it comes to buying bonds, investors have a big choice to make: do you buy individual bonds or bond funds.
Unlike stocks, the choice between buying individual securities or a fund that includes individual securities has major implications.
Here’s a quick guide that explains what you need to know.