Some bonds pay regular dividends. Some pay only the face value at maturity. Municipal bonds are those issued by state or local governments to finance public works projects or services. The interest on municipal bonds is not taxed by the federal government and may not be taxed by the state. Municipal bonds sold by Ohio governments are not subject to Ohio income tax.
Junk bonds are highly speculative and risky investments.
Only those who can tolerate a great risk of their capital should purchase these bonds. If the issuing company is successful, the bonds may greatly increase in value. Mutual funds are pools of funds from many individual or institutional investors who share ownership of groups of stocks or bonds. Funds may also specialize in funds of small companies, fast growing companies, foreign companies or certain industries, such as technology companies. One advantage of a mutual fund is that the investor is somewhat diversified.