Bonds are one of the best investment vehicles for a number of different people because they are safe and reliable. However that does not mean you should jump blindly into the bond market. Thankfully there are a host of great books related to the topic of getting started in bonds. These are just five great books for new investors.
The greatest investing books are those that introduce an idea and illustrate how history has proven that idea. What I love about Maeda’s book is that she ties the history of bonds to how they operate and what goals they seek to accomplish for the investor. Besides being an economic historian Maeda does an excellent job of highlighting why someone would invest in bonds which makes this guide important. All of this is tied perfectly around the top of the financial crisis in 2008 giving it more credit as a useful text.
What excellent book list would be complete without a text from the For Dummies Series? Sticking to the original brand, Wild breaks apart each and every aspect of bonds into an easy to digest reference that you can go back to as often as you need. He does an excellent job of making sure you understand all of the tax, expense and payout of bonds in each and every situation. You will even get some great tips on how to work with your broker on bonds. As with everything commissions are negotiable. Find out how.
Maybe you already understand bonds but need a reference on how to strategically place them in your portfolio. This book explains the different types of allocations in bonds as well as how much risk one is going to or willing to take within a given bond market. If you are interested in a more aggressive side to bonds, opposite of the conventional wisdom of them being boring investments, Anthony Crescenzi provides that information.
Many bond investors are riskier than those in other securities like stocks or ETFs because they focus their attention on junk bonds. Junk bonds offer an incredible amount of risk compared to other pieces of fixed income but also a much better reward. Robert Levine has the experience an credentials to advise you on the best places to look for junk bonds. His use of charts and macroeconomic market signals give you a great opportunity to learn from one of the most successful junk bond investors of all time. Don’t discount Greek bonds until you’ve read this text!
Municipal bonds are one type of fixed income that give investors much more opportunities and represent risk reward comparable to equities. This book does a great job of introducing municipal bonds, otherwise known as muni’s. He also shows you where you can buy them, not just individually but in ETFs and closed end funds. Perhaps most valuable are his calculations on how you can mathematically figure out what your potential returns will look like. Learn how to allocate these bonds into your portfolio.