Your typical independent investor will never be able to understand every aspect of bond investing. Research on bonds fills volumes. It is for this reason, therefore, that you do as much research as you can prior to investing, and if you can, take advantage of professional investors that can manage a portfolio for you.
1. Bond Ratings
Not all stocks are created equal – some are a strong buy whereas others are holds or sells. Bond ratings get assigned over 20 different possible designations, from AAA (Highest Grade) to C (May Be In Default) or worse. Also, those designations are backed by some of the most thorough historical and technical research on the planet.
2. High Predictability Makes A Safe Investment
Bonds always have an associated interest rate and a set maturity date. This makes bonds more predictable. Those two factors alone makes possible the use of an array of mathematical tools to provide predictions of future yields and price with a confidence unmatched by any other investment.
3. AAA Bonds
The absoulte best quality of bonds are ones that are rated AAA. They carry the smallest degree of investment risk, and thus, the...