{"id":14461,"date":"2023-02-28T14:32:11","date_gmt":"2023-02-28T20:32:11","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=14461"},"modified":"2024-01-29T11:09:57","modified_gmt":"2024-01-29T17:09:57","slug":"bonds-vs-bond-mutual-funds","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/bonds-vs-bond-mutual-funds","title":{"rendered":"Bonds vs Bond Mutual Funds"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"14461\" class=\"elementor elementor-14461\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-40a35f36 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"40a35f36\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5815c50b\" data-id=\"5815c50b\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-12e53644 elementor-widget elementor-widget-text-editor\" data-id=\"12e53644\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p>Since many of today\u2019s financial advisors got into the business in the 1980s and 90s, during the best stock market in U.S. history, most have become stock market specialists. Frankly, if they do fixed income, it\u2019s usually an afterthought, and most will simply take the easy way out and invest their clients\u2019 money in bond mutual funds.<br \/><input name=\"gform_field_values\" type=\"hidden\" value=\"\" \/><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b6e28a8 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"b6e28a8\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-54dd59c\" data-id=\"54dd59c\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element 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stock market in U.S. history, most have become stock market specialists. Frankly, if they do fixed income, it\u2019s usually an afterthought, and most will simply take the easy way out and invest their clients\u2019 money in bond mutual funds.<\/p>\n<p>What many people don\u2019t realize is that bond mutual funds carry risks, costs, and tax implications that can be reduced, or even eliminated, by investing in a diversified portfolio of individual bonds, or other fixed-income securities.<\/p>\n<p>That\u2019s because when an investor buys an individual bond, they receive two important guarantees. First, they\u2019re guaranteed a fixed rate of interest for the life of the bond. Second, when the bond matures, they\u2019re guaranteed their principal back\u2014assuming there have been no defaults. With that assumption, an investor knows what they\u2019re going to earn on the bond if they hold it to maturity. They also know the maturity date and the name of the company they are invested in. But what about bond mutual funds? How do they compare to individual bonds?<\/p>\n<p>For starters, both guarantees that come with individual bonds are \u201coff the table,\u201d so to speak, when it comes to bond mutual funds. Bond mutual funds don\u2019t pay a fixed rate of interest. The interest they pay fluctuates. What\u2019s more, bond mutual funds never mature; your investment in the fund will continue until you decide to liquidate it.<\/p>\n","protected":false},"author":1,"featured_media":16463,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"elementor_theme","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4,5],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bonds vs Bond Mutual Funds - Johnson Wealth and Income Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/johnsonwim.com\/bonds-vs-bond-mutual-funds\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bonds vs Bond Mutual Funds - Johnson Wealth and Income Management\" \/>\n<meta property=\"og:description\" content=\"Since many of today\u2019s financial advisors got into the business in the 1980s and 90s, during the best stock market in U.S. history, most have become stock market specialists. Frankly, if they do fixed income, it\u2019s usually an afterthought, and most will simply take the easy way out and invest their clients\u2019 money in bond mutual funds.  What many people don\u2019t realize is that bond mutual funds carry risks, costs, and tax implications that can be reduced, or even eliminated, by investing in a diversified portfolio of individual bonds, or other fixed-income securities.  That\u2019s because when an investor buys an individual bond, they receive two important guarantees. First, they\u2019re guaranteed a fixed rate of interest for the life of the bond. Second, when the bond matures, they\u2019re guaranteed their principal back\u2014assuming there have been no defaults. With that assumption, an investor knows what they\u2019re going to earn on the bond if they hold it to maturity. They also know the maturity date and the name of the company they are invested in. But what about bond mutual funds? How do they compare to individual bonds?  For starters, both guarantees that come with individual bonds are \u201coff the table,\u201d so to speak, when it comes to bond mutual funds. Bond mutual funds don\u2019t pay a fixed rate of interest. The interest they pay fluctuates. 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Frankly, if they do fixed income, it\u2019s usually an afterthought, and most will simply take the easy way out and invest their clients\u2019 money in bond mutual funds.  What many people don\u2019t realize is that bond mutual funds carry risks, costs, and tax implications that can be reduced, or even eliminated, by investing in a diversified portfolio of individual bonds, or other fixed-income securities.  That\u2019s because when an investor buys an individual bond, they receive two important guarantees. First, they\u2019re guaranteed a fixed rate of interest for the life of the bond. Second, when the bond matures, they\u2019re guaranteed their principal back\u2014assuming there have been no defaults. With that assumption, an investor knows what they\u2019re going to earn on the bond if they hold it to maturity. They also know the maturity date and the name of the company they are invested in. But what about bond mutual funds? How do they compare to individual bonds?  For starters, both guarantees that come with individual bonds are \u201coff the table,\u201d so to speak, when it comes to bond mutual funds. Bond mutual funds don\u2019t pay a fixed rate of interest. The interest they pay fluctuates. 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