Why Invest? - Why Invest In Bonds?

Published on: May 09, 2018

Author: Bliss Seepersad - Wealth Manager

Volatility can work to the advantage of Bond investors. Investments in bonds or fixed income instruments can negate the potential volatility an investor could experience in the stock market.

Some of the potential benefits of investing in bonds are:

  • Bonds offer a reliable income stream
  • A diversified Bond Portfolio can provide decent yields with a lower level of volatility than equities. In many instances Bonds can provide higher income than traditional bank instruments
  • Bonds can help to reduce volatility and preserve capital for equity investors during times when the stock market is falling.
  • Fixed income instruments are useful for persons nearing the point where they will need to use the cash they have invested. For instance, an investor within five years of retirement or someone who needs to use their investment to pay for their child’s university education.

While stocks can experience huge volatility in a short period, a diversified Bond Portfolio is much less likely to suffer large losses in a short period. As a result, investors often increase their allocation to fixed income, and decrease their allocation to equities as they move closer to their goal as a means of protecting the gains that have been made over time.

Need to know more about Bonds?  Call GAM at 226-2799 or sign up now for a free consultation at 

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