A Checklist for Taxable-Bond-Fund Investors
Five considerations for those investing in fixed-income funds.
A bond is a pretty simple investment. Governments and corporations issue bonds to raise money, and in return, they offer bond investors regular interest payments and a return of the principal investment at the bonds' maturity dates. Investors--especially income-seeking investors, such as retirees--like bonds for their steady stream of income and stability when compared with stocks.
But choosing a suitable taxable-bond fund is more difficult than it might seem. The considerations are multiple and can be intricate. There are credit-quality decisions, interest-rate sensitivity choices, and of course, determining whether you should invest in a single core holding or add supporting players around a core.