nvestors purchase bonds with these goals in mind: income, preservation of capital, total return (including not only interest, but also capital gains), and liquidity. Many investors choose to add bonds into their overall investing strategy later rather than earlier, but due to their relative safety, investors who want to reduce their overall risk of loss across their investment portfolio may find bonds an attractive option.
Bonds are useful investing tools for these reasons:

• bonds provide a steady, if predetermined, flow if interest income
• holding a bond until maturity usually means a full return of your initial investment
• some bonds include options to sell the bond at a higher price than it was originally sold

The risks to bonds include loss of your investment if you have to sell a bond before it matures, or loss of investment if the issuer defaults. It is important to understand that even if a company that issued a bond goes bankrupt, those who hold bonds have a better chance of receiving their money back than those who own stock in the same bankrupt company because the bondholders (debts) are paid first.