Wealth Building :Bonds

At Woodberry Wealth Management & Associates, we provide a one-stop shop for wealth building. We help clients make sound investments that will protect their assets and build wealth. One of the many investments we specialize in are various types of bonds. We work with a team of Certified Bond Brokers in NYC. If you live in New York, and you’d like to add bond investments to your portfolio, we are here to help.

Build Wealth with Bonds

What is a bond? Simply put, a bond is formal evidence of a debt. When you buy a bond, the issuer promises to pay you a specified amount of interest at specified times, and repay the principal (usually on a fixed date). In terms of your investment objectives, bonds generally offer greater safety of principal and certainty of income. Tracking bonds and choosing which to invest in can be complex, but with the right bond brokers in NYC, they are a great investment. Here are some benefits to investing in bonds:

  • Safety and Ease:

    Bonds are a great investment for new investors. The concepts of bond investing are easy to grasp, and it provides a safer investment than equity, because if a company goes bankrupt, debtholders are paid before shareholders. Bonds from the government are even safer, often deemed as risk free.

  • Steady, Predictable Returns:

    Bonds offer security and predictability. Having a portfolio that consists entirely of stocks is risky. Adding bonds will help maintain a strong portfolio in times of recession, when the value of stocks decline.

  • Great for Saving:

    Sometimes bonds are the only secure option. The interest rates on bonds are higher than those paid by banks on savings accounts. If you can wait for interest to accumulate, bonds provide a steady return with minimal risk

Types of Bonds

Since there are various issuers of bonds, the safety and income return of the bond depends on its issuer, and the extent to which it’s secured. Generally, federal government bonds are safest, and for that reason offer the lowest yields, while corporate bonds are a little less safe, but offer a higher yield.

Government bonds

are among the safest bond investments. Often times, the city or federal government offers bonds because they are in need of income. Therefore, you as an individual or company make a fixed investment for a promise of future returns.

Municipal bonds

are offered by local governments. They are generally risk free because cities don’t often go bankrupt. A great advantage of these bonds is that the returns are exempt from federal tax.

Corporate bonds

are as safe as the company issuing them. The bondholder will receive the interest and principal due unless the firm goes bankrupt, or otherwise ceases operations. In cases of bankruptcy, the bondholder has a claim against the assets of the firm.

“Junk” bonds

are low-rated corporate bonds. They grant little security, but offer the highest return of all bonds. Often these corporations must pledge that certain assets be tied in. If the corporation defaults, these assets accrue to the bondholders. Some bonds are not secured by specific company assets; these bonds are known as debentures.

Debentures

can be exchanged for shares of stock in the company that issues them at a special price. While bonds are safe and easy to market, they offer limited opportunity for growth or higher income. Debentures provide an alternative.

Investing in bonds is a great way to diversify your portfolio, and build wealth. For qualified bond brokers in NYC, turn to Woodberry Wealth Management & Associates.
Contact us today to learn more about wealth building with bonds.