Bond investment instruments are in great demand by all groups, both beginners and experienced investors, bonds also have lower risks than stocks, however, we cannot just buy bonds carelessly, we have to consider many factors to optimize profits. Some of them are the type of bond, term, credit rating, company's ability to pay bond coupons or pay bond principal. So when you want to invest in bonds, don't just pay attention to high interest rates. Here are several ways to choose a profitable type of bond as follows:
1. Learn about the types of bonds that suit your investment targets
As beginner investors, we need to study various types of bonds and also learn the advantages and disadvantages of each type of bond. Choose the type of bond that suits your investment target. Like you can choose bonds based on coupon, issuer, maturity etc.
2. Determine the Right Time to Buy Bonds
The secondary market is considered to have greater potential for profit or capital gains, so according to some experts we can use central bank interest as a reference, for example when interest rates rise then bond yields also rise, while bonds in the secondary market will fall so it is considered a good moment. right to buy bonds
3. Monitor Interest Rates
As bond investors we must always monitor interest rates for any type of bond, bond yields will be inversely proportional to interest rates, if interest rates fall then the potential profit from bonds will increase and vice versa.
4. Get to know the debt securities issuer
As evidence of bonds, investors must know well who the issuer is, whether it is a government agency or a private corporation. so you can choose bonds that are safe and profitable.
5. Develop a Strategy and Monitor Market Conditions
Even though investment is considered passive income which only requires a little work/effort, that doesn't mean we can be lazy and just wait for returns, but we also need to develop a strategy based on risk, time, goals, etc. Apart from that, investors also need to monitor the market, especially regarding interest rates.
1. Learn about the types of bonds that suit your investment targets
As beginner investors, we need to study various types of bonds and also learn the advantages and disadvantages of each type of bond. Choose the type of bond that suits your investment target. Like you can choose bonds based on coupon, issuer, maturity etc.
2. Determine the Right Time to Buy Bonds
The secondary market is considered to have greater potential for profit or capital gains, so according to some experts we can use central bank interest as a reference, for example when interest rates rise then bond yields also rise, while bonds in the secondary market will fall so it is considered a good moment. right to buy bonds
3. Monitor Interest Rates
As bond investors we must always monitor interest rates for any type of bond, bond yields will be inversely proportional to interest rates, if interest rates fall then the potential profit from bonds will increase and vice versa.
4. Get to know the debt securities issuer
As evidence of bonds, investors must know well who the issuer is, whether it is a government agency or a private corporation. so you can choose bonds that are safe and profitable.
5. Develop a Strategy and Monitor Market Conditions
Even though investment is considered passive income which only requires a little work/effort, that doesn't mean we can be lazy and just wait for returns, but we also need to develop a strategy based on risk, time, goals, etc. Apart from that, investors also need to monitor the market, especially regarding interest rates.
