You are an investor and you have decided to invest in bonds. There are a couple of very important factors that you must consider when deciding which bonds to purchase and where. Buying bonds can be a hectic activity if you are unprepared. However, if you have done your homework, then it will be a piece of cake.

There are various types of bonds available in the market. Government bonds are considered one of the safest, if not the safest type of bonds for investment. In the UK, government bonds are called gilts, and in the US, they are called treasuries. Companies also issue bonds to raise capital. However, they have to offer better interest terms for their bonds to compensate for the risk levels. For the investor, this means greater risk, but greater yields, too.

Another factor to put into consideration is the amount of time that you are investing your money. Bonds come with maturity periods, which is the time during which your money will be held while interest is accumulated. Some bonds may be recalled. This means that they can be resold before maturation, and this may be beneficial for you. However, some cannot be recalled, and heavy penalties are imposed for recalling. This will be particularly noteworthy in case you will need the money released after some time.

Say you have decided to invest in corporate bonds. How can you tell the risk level of a company? This can be done through the help of rating agencies. In the UK, two agencies come to mind; Moody's and Standard & Poor's. These use a system for rating the safety of a bond, where AAA and BBB are good ratings while D indicates defaulting. However, note that these ratings are based on probabilities and are not actual guarantees.

Timing is also crucial when buying bonds. Although this may not make much difference, due to the low returns of bonds in general, a good investor will buy bonds before interest rates go down, and resell them when they do. This way, you earn a capital gain on your principle amount.

Gilts can easily be bought through your stockbroker, or the Bank of England's brokerage service, at a fee. Alternatively, you could choose to buy them directly via the Post Office or the Debt Management Office. Note that income from gilts is liable to tax and must be declared in your tax returns. Capital gains, however, are tax-free.

You can also buy individual corporate bonds on the stock market. If you are a small investor, you may prefer to invest via a mutual fund, as they are better equipped with knowledge on the bond market.

Financial Investments are critical in a world where money rules and survival is certainly for the fittest. Money is volatile and seems to come and go at will, but you can be able to safeguard against hard financial times by making strategic financial investment decisions. Saving for a rainy day is no longer a smart idea. Saving implies not keeping your money idle when it could be growing without much effort from you.

Investing comes with risks, and this may be the reason many people are held back from it. However, this need not be the case. There are indeed low-risk investment options in the market. Alternatively, you may also be willing to take greater risk and invest where your money will multiply fast. Of course, the best course of action is to combine both options in your portfolio.

When it comes to low-risk financial investments, you have several options. One of these is to purchase bonds. A bond is simply what may be considered an IOU. But rather than you being the borrower, you are actually the loaner. Governments and corporations issue bonds for the sole purpose of raising funds to carry out projects or expand business.

You may have kept some money aside for your children's college education. This is not money that you want to be risking. If safety is your priority, then government bonds are a sure bet for you. Governments are the least likely to default in paying their debts. When you purchase government bonds, you are entitled to bi-annual interest payments. The bonds continue to earn interest until they mature, which may go for a period of up to 10 years. At bond maturity, you get a refund of your principle amount.

The down-side of investing in government bonds is that they do not earn you much compared to other investment options. If you are willing to invest in a greater yielding venture which is still more or less safe, then corporate bonds are advisable. Companies are more risky to invest in compared to governments, and to compensate for this risk, they offer better interest rates on issuing their bonds. Corporate bonds are safer than stocks since in most cases, they are insured.

The highest yielding and high-risk investment option you can go for is stocks. A stock is simply a share in a company's ownership. A stockholder, also known as a shareholder, stands to benefit from the company's profits. However, the main form of benefiting from stocks is to sell them at a higher price than you bought them, which could easily be in multiples if the company does well. The risk here is that if the company collapses or goes on a loss, shares become worthless and your investment could be altogether lost.

NASDAQ stock market is a stock exchange market in the US. NASDAQ is an acronym that stands for “National Association of Securities Dealers Automated Quotations”. Trading in this market is done electronically and investors are able to view how the stocks are fairing via a screen. It is by far the biggest exchange market in the United States and second largest with regard to market capitalization throughout the world. In the month of January 2011 this market had 2,872 listings. Compared to other electronic stock exchange markets NASDAQ tops the list in terms of the volumes it trades.

NASDAQ was started by the National Association of Securities Dealers (NASD) in 1971. Financial Industry Regulatory Authority (FINRA) is the body responsible for regulating NASDAQ.

In February 8, 1971, when NASDAQ begun trading in the stock exchange, it was the first ever electronic market. It functioned more as a bulletin board and did not link buyers and sellers. Brokers were not too happy with its inception since it eliminated some of their work hence almost putting them out of business.

NASDAQ was a step up from over-the-counter method of trading. Even as far as 1987, the NASDAQ system of trading was still referred to as OTC method in the media and various stock journals and guides. NASDAQ gained popularity as it went on increasing the trade volume and being the first exchange market to do online trading helped it to thrive in a very short period of time.

In as late as 1987 most trading was still done through the telephone. Demand become so high that stocks could no longer be traded via phone this led to the establishment of Small Order Execution Systems (SOES). This enabled dealers to be able to trade online by entering their transactions electronically. This became widely accepted since it saved time and was more convenient.

The first linkage across the continent was in 1992 when NASDAQ made a connection with the London Stock Exchange. This indeed was the dawn of a new era and investors were very pleased since this meant that they could be able to buy stocks outside the United States. Companies could be listed both in London and in the US and this further led to the growth of stock exchange market.

One of the NASDAQ milestones and accomplishments is that in November 8, 2007, it purchased Philadelphia Stock exchange which was started since 1790 and was the oldest stock exchange market in America. NASDAQ has continued to grow and competes with major stock exchange firms in the world.

As with all investment ventures, investing in bonds also carries some level of risk. Bond investment is indeed one of the safest forms of investment. However, this does not mean that it is completely risk-free. Any potential investor should know and understand these risks. The level of risk may vary with the type of bond and the issuer.

Interest rate risk is the negative effect that changes in the market interest rates may have on your investment. Fixed-income securities such as bonds usually have prices that fluctuate in the opposite direction to interest rates. This applies if you have to sell your bonds before they mature. If the interest rate has gone up, then you will have to sell your bonds at a lower price. Note that bonds with longer maturity periods are most vulnerable to this.

Inflation risk is also important to note. What inflation does is to reduce the value of your bond, even though the principal amount may remain the same once the bond matures. Thus, what you would have purchased before inflation requires a greater amount now. Floating-rate bonds are however guarded against this since their interest rates are adjusted regularly.

There are bonds that have a call provision. This provision allows the issuer to repurchase the bonds at a specified price before the bond matures. This usually happens when the interest rates have fallen substantially since the bonds were issued. This may lead to reinvestment risk. For an investor who did not intend to sell the bond, the immediate reaction would be to invest the recovered amount. However, the returns will now be lower than the initial bond purchase since the bond prices have now gone up.

Default risk is the risk that the bond issuer will become incapable of repaying the bond. This would mean that you would lose whatever money you have invested in bonds. Government bonds hardly carry this risk, but corporate bonds do. A company may be up one day and collapse the next, carrying with it your investments.

Downgrade risk refers to the chance that a high-rating bond that you have purchased may lose its ratings in the market. If a credit rating agency such as Standard and Poor's lower their ratings on a bond, the prices of that bond are likely to fall. This means that if you have to sell the bond, it will be at a loss. In addition, there is also liquidity risk, which means that once you decide to resell your bonds, there may be no buyers for it. This however, does not apply to government bonds, as they can always be sold.

Best bonds is a financial blog that provides general information about best bonds investments. It should be noted from the onset that best bonds does not tell you as a potential investor what is best for you to invest in. Instead, they recommend that you seek the advice of an investment adviser. Among the information they provide is the types of bonds available for you, which include:

• Fixed rate bonds: A fixed rate bond will be dependent on the period of time you want to invest your money. The bonds can either be short, medium or long term bonds depending on your

• Income bonds: In this type of bonds, the investor gets monthly, quarterly or even annual payments at a predetermined rate throughout the life of the investment. Income bonds can help supplement your income and even come in handy after one has retired.

• Growth bonds: These are structured in a manner that the money invested is used in the stock exchange while still providing the investor with a degree of capital protection. Most of these growth bonds are able to give returns in lump sum in addition to the original amount invested. They are also known as high yield growth bonds or capital growth bonds. When dealing with growth bonds it's important to know if they offer a guarantee. One should however note that the guarantee is not certain. Growth bonds are subject to market forces and in these times of recession the yield is not guaranteed the much they can guarantee is the capital you have invested.

• Investment bonds: They are often offered by insurance companies and can either be used as a long term source of investment or as an income. The money invested is handled by professional's managers. Invested bonds are also life insurance covers. In most cases the amount of insurance that will be paid off after death is 1 per cent of the total amount of your investment. The good thing about this type of investment is that the burden of tax lies solely on the insurance company. Except for high rate tax payers who may be subject to tax after a period of time.

• Corporate bonds: This is a way of lending money to companies as you earn interest for a specified period of time. Companies issue these bonds at different rates. It is advisable that you invest in companies that are listed in the stock exchange or are secure.

In the past months, the UK finance market hasn't been looking up. Growth is very slow and interest rates keep rising. The bank of England cautions that the situation is not likely to improve in the near future. Financial analysts predict that things are likely to get worse and the high rate of inflation is to blame for this situation. Inflation analysts affiliated to the UK report that the markets are not likely to recover since the boosts expected from exports have greatly reduced.

UK finance trade market is also taking a downward trend, UK is importing more than it is exporting and this has caused a huge trade deficit. King's an economist argues that, Britain's future is highly dependent on trade and investment. Many consumers are being held down by taxes which have greatly risen and increased the cost of living hence leaving very little money for investment. Investors have also shied away from putting their money into consumer related industries hence leaving this to the government and the external market. Demand has also been greatly affected leading to low productivity since the cost of raw materials and in overall the cost of production is so high. The economy is hence not producing to its maximum.

Another major player in the UK finance is the job market, which is under siege since it's really being pressured. Statistics indicate that unemployment went up by 35,000 reaching to a subtotal of 2.5 million in the recent months. There is a general trend towards reducing public spending. The greatest costs that companies incur are labor costs, so a pinch in the economy forces them to downsize hence leaving a lot of people jobless. The many graduates flooding the job industry are left without jobs since most companies have resulted only to hire new staff in 2012 that is if the current situation gets better. The few companies hiring new people are doing so on contract basis no one can promise permanent jobs in the current economic crisis. Many of the job cuts have affected the public sector but the private sector does not have the capacity to cause the economy to improve since they are also a victim to the high costs of fuel and oil being experienced hence stifling production.