Investing in Bonds

Investing in bonds is the best solution for $1000000. With a coupon rate of 10% a dividend growth of 5%, the investment will enable yearly profits that are high. Bonds are always issued by various organizations and governments for purposes of raising more capital. When buying this kind of debt, investors are assured of getting yearly amounts which are commonly referred to as coupon, coupled with the whole capital at different set dates as agreed by the issuer of the bonds. Since such amounts are payable at different set dates, there will be an assurance of earning a fixed income while increasing an investor's portfolio. The best bonds to be bought by the whole amount will be government bonds because they are usually safe because nations are often able to pay back the amount given without any default. Organizations, on the other hand, are riskier because they might fail to honor their payments in case they go under receivership, while others can run out of business easily. To ensure consistence and actual amounts to the investments a long period of like ten years will be favorable for the investment. Longer tenors for the given amount will not only ensure safety but also amounts that are consistence in nature. There has been a common belief that only wealthy institutions can invest in bonds, but individuals are also not limited to this kind of investment portfolio. Before the bond is purchased the investor will be required to open an account with the central banks and fill a different form which will indicate the type of bond to be purchased, and the term, which is its maturity date. The investment is not risky, and with this condition, there will be lower return rates