Debt Instruments of Investment: the best investment option.

Millions of investors have incurred heavy loses by the end of 2008 following the 1 year of unprecedented stock market volatility. This has not only shaken the confidence of the investors, but also made the situation worse as many such investors have already withdrawn considerable sum of money from the various instruments where they have invested. But in contrast to this situation, the global bond investors not only managed to escape the loss, but also bagged considerable profits. Now we may think that what is so special in bonds and what is the reason behind its success. Bonds are debts which are issued by the government and companies. When a person is buying a bond he/she is actually lending the money he/she has invested to the government or companies for a certain period of time. Its just like you are lending the money to someone and getting the interest in return. But your principal amount which you have invested or is safe. Taking care of the present financial market condition it is suggestible to invest in bonds as they are the simplest and safest mode of investment. If this is not enough to motivate you then few facts and figures about the bond performance will be enough I think. It has been seen that the global equity funds have fallen by 24% in 2008 but in comparison the global bond portfolio was up by 16%. The Renfield US government bond fund performed very well with a huge growth of 58%.Quite strange yet a positive indication to the investors. The list doesn’t come to an end. There are other players too. The SWIP global bond fund experienced a growth of 53%, Henderson overseas bonds experienced a growth of 49 %. Now if you are wondering that what is the reason behind this success story inspite of this global financial turmoil, the answer is huge currency fluctuations. Besides the reduction in interest rates has helped in pushing the prices return up. It is really a positive indication to the investors. Besides, people who have just started to invest or already invested in few stocks and incurred losses, must shift to bond investments and its times to balance your portfolio. Often people underestimate bond investment looking at the return or performance in comparison to the stock investment. But Bonds I feel are the safest and best instrument to invest in, taking care of the present market scenario. In matters of investment, “slow and steady always wins the race”.