Bonds – that’s what makes them special
André Kostolany was right: unlike equity investors, bond buyers can usually sit back, relax and enjoy their interest payments. But what characterizes a bond?
Bonds are debt securities. Some people also speak of interest-bearing securities, bonds or bonds. Don’t let the variety of terms confuse you. The important thing is how the paper works: When you buy a bond, you give the issuer of the bond a loan. In return, you receive interest and, if everything goes well, your capital back at the end of the term (redemption). Depending on who issued the promissory note, one speaks of a government bond or a corporate bond. And depending on the issuer’s ability to pay (creditworthiness), there are secure bonds, bonds for opportunity-oriented investors and even highly speculative bonds that promise the investor equally high returns.
Incidentally, you do not necessarily have to take care of the selection of suitable pensions yourself. When you buy a bond fund, you delegate the selection of your bonds to a fund manager. Advantage: With a bond or bond fund, you invest in many bonds with one security, thereby eliminating the individual value risk and reducing your investment risk.