There are two types of bonds, one, corporate bonds, and two, government bonds. Corporate bonds are issued by private organizations and they usually have higher interest. Likewise, government bonds are the bonds issued by the government or government agencies, a municipal commission, for instance, and have lower interest rates. While government bonds are considered less risky investments, corporate bonds are labeled as risky assets.
Corporate Bonds Vs. Government Bonds
- Thread starter nomad
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Actually, they are both risky but if I am told to choose one, I will still choose government bonds. Anything that belongs to the government us still a bit secured and better than the one that does not belong to the government
I am not a fan of bond investment because investment in bond requires huge level of capital if you want to make substantial profit.
I am not sure if the value of bond could increase or fluctuate. However, I think that bonds are governmental securities and such securities could be quite risky.
This is an amazing easy choice for me. I like to play safe and between the two, government bonds are generally less risky. That is the one I would pick regardless of the low interest.
I am a conservative investor. I bought government bonds simply because they are less risky. But the interest tends to be quite low. That is the downside of it. If I buy corporate bonds, the corporation issuing the bond must be reputable and trustworthy.
Despite that corporate bonds have higher interest rates than government bonds, I would prefer government bonds. This is because government bonds are associated with lower risk than corporate bonds. That is, it is more difficult for a government to fail or default than it is for a corporate entity.
I generally prefer government bonds, although I haven't really invested in them, but if I had to choose between the two, I would be more conservative and invest in government bonds because of their low risk, especially Triple AAA ones like the US ones.
Government bonds aim to build the country, while corporate bonds are to finance companies. Investing in government bonds requires less capital than investing in private company bonds. In my experience, government bonds are more suitable for novice investors because they have a lower risk, while corporate bonds are more suitable for long-term investments for investors who have more funds.
