Should you invest in bonds in 2567? Bonds vs stocks — only by comparing like this can you understand.

In today’s environment of high uncertainty in the financial markets, where should you put your money? Not daring to fully invest in stocks, afraid of buying gold at a peak, and with bank deposits offering pitifully low interest rates, bonds have become a popular choice for many investors. But are bonds really worth investing in? Which is more suitable for you—stocks or bonds? Today, let’s discuss this topic.

What exactly are bonds?

Simply put, bonds are like IOUs. When you buy a bond, you’re lending money to a company or government, which pays you interest periodically and returns your principal at maturity. Compared to regular bank deposits, bonds offer higher interest, but they also come with greater risks.

There are five main risks associated with bond investment:

1. Default risk of the issuer

If the issuing company’s financial situation deteriorates, it may default on repayment at maturity, putting your principal at risk.

2. Interest rate risk

Interest rates fluctuate with economic conditions. If you buy bonds and interest rates rise afterward, you miss out on better investment opportunities.

3. Liquidity risk

Bonds don’t have as active a trading market as stocks, so selling midway might be difficult or you may not find a buyer.

4. Inflation risk

If the interest and principal received do not keep pace with inflation, your purchasing power declines.

5. Reinvestment risk

When bonds mature, if there are no better investment options, your returns may decrease.

Be aware of implicit rights associated with bonds:

• Issuer’s early redemption right: The issuer may redeem the bond early, causing you to lose future interest income
• Investor’s early redemption right: You can request to redeem the bond early
• Conversion right: You can convert the bond into the company’s stock, potentially earning from stock appreciation

What are the classifications of bonds?

By issuer type

• Government bonds: Lowest risk, relatively low interest
• State-owned or public institution bonds: Risk between government and private enterprises
• Corporate bonds (company bonds): Higher risk but more attractive interest

By payment method

• Fixed interest bonds: Pay fixed interest periodically, principal returned at maturity
• Compound interest bonds: Pay interest irregularly, with interest accumulating and paid at once at maturity
• Zero-coupon bonds: Purchased at a discount, redeemed at face value at maturity

By interest rate type

• Fixed-rate bonds: Interest remains unchanged
• Floating-rate bonds: Interest adjusts with market rates

How do bonds generate profit?

Bond returns are relatively straightforward—periodic interest payments plus principal repayment at maturity. If you sell before maturity, the price may be higher or lower than your purchase price, offering an opportunity to profit from price differences.

Bond trading occurs in two markets:

Primary market (initial issuance)

Purchasing directly from the issuer through banks or securities firms. Careful review of bond terms, lock-in periods, and yields is essential here.

Secondary market (resale)

Buying bonds that have already been issued. This market offers better liquidity, but prices fluctuate with interest rate changes.

Are bonds worth investing in?

Several clear advantages of bonds:

1. Flexible investment periods — from 1 day to 20 years, various maturities available
2. Stable cash flow — regular interest income, higher than bank savings
3. Controllable risk — less volatile than stocks and funds
4. Strong capital preservation — unlike stocks, which can lead to total loss, bonds are prioritized in liquidation
5. Sufficient liquidity — can sell in the secondary market when needed

Bonds vs. Stocks, which should you choose?

Three common allocation strategies:

• Young and aggressive: 100% in stocks for long-term growth
• Older and conservative: 70%-80% in bonds + 20%-30% in stocks, focusing on capital preservation
• Balanced approach: 50% bonds + 50% stocks, balancing growth and stability

This approach is called “asset allocation,” an effective method to prevent significant losses during financial storms.

Conclusion

Bonds remain a solid investment tool in 2567. Regardless of market fluctuations, their regular interest income and relatively low risk make them an essential part of any portfolio. But remember—single investments are never as good as diversified portfolios. Combining bonds and stocks appropriately is the smartest way to navigate uncertain markets. Choose the right allocation plan for yourself, and let your wealth grow steadily while being protected.