Benefits of investing in Bonds:

+ Current income - they can provide current income for conservative

investors. Bonds are issued by governments and corporations when they want to
raise money. By buying a bond, you're giving the issuer a loan, and they agree to
pay you back the face value of the loan on a specific date, and to pay you periodic
interest payments along JUST the way, usually twice a year.
+ Tax free - some bonds can provide tax free income. The interest from
municipal bonds generally is exempt from federal income tax and also may be
exempt from state and local taxes for residents in the states where the bond is
issued. Tax-free bonds generally have a long-term maturity of ten years or more.
The government invests the money collected from these bonds in infrastructure and
housing.
+ Capital gains - at times they can provide capital gains (or losses) for more
aggressive investors. If you sell a municipal bond for a profit before it matures,
you may generate capital gains. Long-term capital gains (which require a 12-month
holding period) resulting from the sale of tax-exempt municipal bonds are
currently taxed a maximum rate of 15%. Of course, if you sell your security for
less than your original purchase price, you may incur a capital loss. In short, you
can profit if you resell bonds in a higher price.
+Preservations - they can be used for preservations and long term
accumulation of capital. Capital preservation is an investment strategy that aims to
preserve capital and prevent loss of a portfolio. When using this investment
strategy, investors opt for safe assets such as Treasury bills and certificates of
deposits (CDs). BLEH Investors who use this strategy tend to be risk-averse and
have a short time horizon. Often, retirees or those approaching retirement will use
this investment strategy to preserve funds to support their lifestyle after they stop
working.