Investing in Bonds for Beginners

Everything you need to know about bonds.

In this article, we wouldn’t look into the technicality of a bond, but if you’re interested in that, have a look into our other writeup: Bond Yields, Maturity, and Interest Rate.

How many types of bonds are there?

U.S. Treasury


Corporate bonds


What should you consider when buying bonds?

How to buy bonds?

Buy directly (Treasury Bond)

Over-the-counter (OTC)

Bond mutual funds

Exchange-traded funds (ETFs)

Pros and Cons

(We can’t find a picture that properly reflects “pros and cons”, look at this cat tho lol)


  • Short-term stability.
  • Steady Income
  • Less volatile
  • Often used as portfolio diversification.
  • You’d feel like you contributed to society (if you invest in municipal bonds).


  • Tend to underperform in a long term.
  • Incomes are relatively low.
  • It takes a while until you can see that sweet cash — well, quite a long while.

Bottom line

  • Bonds are a financial instrument used to represent a loan obligation between borrower and investor.
  • The borrower here is usually a corporation or government entity.
  • There are generally three types of bonds: U.S. Treasury, municipal, and corporate. When buying bonds, investors should consider credit rating, issuer, market conditions, maturity date, fees, and tax treatment.
  • Bonds can be bought directly from the Treasury, over-the-counter through a broker, or through bond mutual funds & ETFs.
  • Although bonds are generally considered low-risk investments, investors should carefully consider their investment goals and risk tolerance before investing.

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None of the material above or on our website is to be construed as a solicitation, recommendation or offer to buy or sell any security, financial product or instrument. Investors should carefully consider if the security and/or product is suitable for them in view of their entire investment portfolio. All investing involves risks, including the possible loss of money invested, and past performance does not guarantee future performance.

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