Investing in bonds: what they are and how to get into them

If you listen to Warren Buffet, the world’s most renowned and successful investor (he’s worth over $104bn), then there’s one thing you should look into for your own success. That’s holding in your portfolio around 10% bonds. And the rest of it, he suggests, should be thrown into a good exchange traded fund (ETF) that doesn’t cost much to run, paired with high returns. So if you’re in the market, we spoke to our pals at Stake (sign up here) about bonds, what it all means and a couple of ways you can dip your toes in. Remember, this isn’t financial advice – make your own choices. With inflation being the latest buzz-word in economies over the last year, the possibility of increased interest rates are a possibility for the first time in years. With that, exposure to interest bearing assets like bonds has risen too. A bond is a debt issued by governments or corporations. Attached the debt is a fixed interest payment (coupon) rewarded to investors who hold the bond until its maturity date. With the possibility of interest rate rises, the size of the coupon could potentially increase too making bond investing more feasible for the market. What’s the best way to get access to bonds? The beauty of the US stock market is the variety of its offerings. Sure, names like Tesla and Apple headline the market but there are so many different options for investors. There are renewable energy ETFs and volatility products for instance, all wrapped up and made… Read More