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:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
-
Think Twice Before Getting a Credit Card Cash AdvanceA credit card cash advance can be a quick solution when you need emergency help with money. But you'll pay for the convenience with high interest and fees.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
What is AI Worth to the Economy?
The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
Breaking China's Stranglehold on Rare Earth ElementsThe Letter China is using its near-monopoly on critical minerals to win trade concessions. Can the U.S. find alternate supplies?
-
America's Surprising Strengths in Manufacturing and ExportsThe Kiplinger Letter Despite common perceptions that the U.S. doesn't build things anymore, American factories are still hard at work. A special report from The Kiplinger Letter.
-
The Economic Impact of the US-China Trade War
The Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
What DOGE is Doing NowThe Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
-
A Move Away From Free TradeThe Letter President Trump says long-term gain will be worth short-term pain, but the pain could be significant this year.
