Government Bonds

According to info.nbfinancial.com, government investment bonds come with face values of $ 1,000 or $ 10,000.

These bonds may be perfect for conservative investors who want to earn income on investments.

The returns on government bonds are usually higher than GIC and CSB. Speculators would buy government investment bonds cheap from companies that are in financial difficulty.

They hope to earn significant income when these companies recover from their debts. This means they are also at risk of losing all their money if the issuer companies do not recover.

One of the risks government investment bonds holders have to face is rising interest rates due to inflation.

When this happens, bonds prices will drop and selling them may not yield any return. The longer the bond terms, the higher the risk. Whenever there are indications that rates will fall, aggressive investors will buy long term government investment bonds. Because when rates fall, bonds prices will go up. This way they hope to gain profit from selling them.