Bonds belong in your investment plan for good reasons, but maybe not for the reasons you think. Economic forces that depress stock prices — the early stages of a recession, for instance — tend to boost bond prices. Bonds can generate impressive profits from capital gains. Sometimes you can even calculate those gains years in advance on the day you buy the bonds. Bonds can provide a predictable stream of relatively high income you can use for living expenses or for funding other parts of your investment plan. Some kinds of bonds offer valuable tax advantages and unparalleled opportunities to take advantage of the time value of money, that is, to invest a modest amount with a reasonable prospect of collecting a large amount a few years later.
Note that the word "safety" doesn't appear in that list of bond benefits. A lot of people think bonds are about the safest investment around, but such a notion can be costly. To learn more about how to invest in bonds, check out the following stories:
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Bonds come in a variety of forms, but they all share these basic traits.
Not all bonds are created equal. From agencies to zero-coupons, learn the basics behind a variety of bonds.
The Relationship Between Yield and Price
You'll know how much interest you'll receive from the beginning, but you can also profit from price moves on the secondary market.
This simple relationship between long- and short-term interest rates can tell you a lot about the bond market.
Bonds have risks you won't find in other types of investments. Find out how to spot risky bonds and how to avoid them.
-
Stock Market Today: Stocks End Higher in Whipsaw SessionThe main indexes were volatile Thursday with Nvidia earnings in focus.
-
Trump Picks Dr. Oz as Head of Medicare and MedicaidPresident-elect Donald Trump picked Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services. Here's what to know about the former TV host.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
-
Kiplinger Special: How Businesses Should Budget for 2025Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
-
Intel Braces for an Even Tougher Road AheadThe Kiplinger Letter Amid a long, costly turnaround, Intel resets expectations again. Its new woes raise questions about U.S. industrial policy and global chip competition.
-
Kiplinger Special: The Long-Term Future of the U.S. Economy
The Kiplinger Letter Kiplinger's report into what it will take the U.S. to maintain a healthy economic growth rate.
-
Fed Rate Cuts Still on HoldThe Kiplinger Letter With inflation stubbornly elevated, the Federal Reserve will keep interest rates high for now.
