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Introduction

Many investors decide to have a portion of their money in bonds or bond funds, and some experts say as much as 30 percent of your money should be invested in bonds. 

Why? Bonds are very liquid -- easily sold -- and can be less risky than stocks, to start. They are fixed-income investments that pay interest, which means safer and more dependable income than many other investment choices. 

A bond is very similar to an I.O.U. with interest. When you buy a bond you are giving money to a government, a corporation or a municipality—and it in turn issues an “I.O.U.” for the money you provided. Until that money (called the face value of the bond) is paid back to you on a specified date, you are paid interest on it. 

Here are the types of bonds you can choose from: U.S. government securities, municipal bonds, corporate bonds, mortgage and asset-backed securities, federal agency securities and foreign government bonds. 

It used to be hard to find information on the Web about bonds, but that’s not so anymore. 

A good place to look may be The Bond Market Association site. This site has a great deal of information on bond basics as well as free bond price information on corporates, municipals and treasurys. It also has bond news and research information, and a list of bond dealers. 

Bonds Online is another good source to know—it’s run by Twenty-First Century Municipals Inc., an online information- services company based in Mercer Island, Washington. It has various news sections on the fixed income market and a bond market commentary updated everyday. Price quotes and research reports can be found there, too. 

You can also go to the official site for Treasury bond information, which is the Bureau of Public Debt Online. Ever wonder what that savings bond is worth? The site has a calculator to help you figure it out and will even let you buy savings bonds online. But there’s a ton of more bond information there for you to peruse. 

Also, visit the mutual fund types page to find out more about bond funds.

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These discussions are for educational purposes only and are not intended to be investment advice. If you would like to send your comments, please email us.