Why Are Bonds Still An Investment Option?

Bonds generally are corporate debts that are issued out by companies. These assets can be traded and are considered to be one of the best investment options available in the market. There are various types of bonds available for investors to invest in them after thorough research.

If you are an accredited investor Wholesale Bonds are a good option to invest your capital. These bonds are generally only offered to accredited investors or financial institutions as these bonds need to be purchased in large denominations of at least $200,000. However, there are various benefits of investing in these bonds, such as:

● Diversification

Gaining access to a wider range of bonds available in the market is quite beneficial for the investors as they could diversify their portfolios. Wholesale bonds provide the investors the opportunity to diversify their investment allocations. This is done by providing the company with a huge number of issuers and investors with investment opportunities. People are allowed to invest in bonds across the globe while entering different country markets. This reduces the chances of incurring losses and exposes the investors to more opportunities in return.

● Secondary market liquidity

Wholesale bonds offer the investors liquidity, allowing them to trade these bonds in the secondary market. There is no penalty fee charged while exiting unlike endowments or fixed deposits with pre-termination clauses. However, the investor would not receive the coupon payments for the rest of the bond's tenure and will be returned the principal amount on their exit.

● Fixed income

Wholesale bonds allow people to plan their cash flow in the various stages of life. These bonds provide the investors with predictable cash flows. These cash flows come in the form of regular coupon payments. These coupon payments are counted as fixed income for the investors till the time of maturity. These coupons are generally provided to the investors during a pre-mentioned duration.

I hope my response helps you understand about wholesale bonds!

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