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Should You Buy Bonds For Your Child?

Even adults can become bored with bonds. Maybe you’re reading right now and wondering what a bond is? How can your child benefit from them? A bond is a loan you give to a borrower, usually the government. Think of a bond as an I.O.U between your child and the government. The investment is used by the government to finance city projects and other events. The bond has a date where the government has to give you back your money with interest, and that is how you profit. Bonds are much different than stocks or index funds so it’s important to know what you’re getting your child into before investing. Here are a few tips to get you started.

 

Have A Goal

Are you buying your child a bond to fund their college tuition or help them start saving for retirement? If you are buying bonds for your child we recommend making them part of a portfolio, along with stocks and ETFs. 

 

Research, Research, Research!

It’s important to brush up on your knowledge of bonds before buying them for your child. Usually, bonds work opposite of the stock market; so when the market is up, bonds are down, and vice versa. 

 

Don’t Try To Time The Market

Do not try to guess interest rates and when to sell or when not to sell. In bonds, decisions are usually made based on previous interest rates instead of the future. Have a clear investment strategy planned out and stick to it. 

 

If you need some in-depth bond knowledge look no further than Explorer Hop! Our fixed income virtual course is fun and easy to understand and will also give you a serious advantage when it comes to making the right investment for your child. To learn more visit: https://explorerhop.com/products/998288?_pos=6&_sid=ef91ce7fa&_ss=r 

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