MONEY OBEDIENCE

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Bond funds are similar to stock funds except that bond funds invest money in bonds rather than stocks. (Please go to stock funds to read a more detailed discussion of funds.) Bond funds, like the bond market, tend to be more stable and less volatile over time; so some perceive bonds to be "safer" investments. But, bonds also tend to bring less earnings over the long term when compared to more "risky" investment alternatives such as stocks.

As with stock funds, the simple and cheaper solution is most often the best one: consider buying bond index funds instead of singular bonds. If you are interested in learning more about bond index funds as an investment vehicle, I suggest that you discuss bond index funds with an advisor at Vanguard or another company which offers index funds.