These are just a few things that an investor should have in mind before exploring the market for corporate bonds. Despite their surprisingly complex nature, corporate bonds continue to be a popular and safe investment for many reasons. Unlike treasury bonds, they are not backed by the full faith and credit of the federal government. However, corporate bonds tend to offer much higher yields than either treasury bonds or CDs. These ratings signify the ability for the issuer of the bond to make interest and principal payments on time.
Corporate bonds are very attractive for investors looking for a dependable source of income.
Healthy interest rates offer this steady income while preserving principal. Contrary to many investors' belief, bonds can be relatively liquid. Corporate bonds can easily be sold before their maturity date without much delay. Because of their appeal and the great size of the bond market, corporate bonds continue to be an excellent and versatile way to invest. Corporate bonds will always be an attractive asset for investors, but it's important to remember that no investment is without risk.