Pros and Cons of Investing in Government Bond

[Nomad]

If you want to invest in an asset that provides guaranteed returns and has low risk, try investing in government bonds. However, just like other assets, investing in government bonds also has its downsides. Here's a simple breakdown:

Pros

Safety: It is very unlikely that the government will cheat on people, therefore, you will get your money back (principal amount as well as return on your investment)
Diversification: If you want to diversify your portfolios and want a balance between high risk assets and low risk assets, government bonds are the answer.

Cons

Low Returns: returns on government bonds are comparatively lower than other assets like stock market, mutual funds, real estate, etc.
Maturity Matters: You will have to lock your funds for an extended period of time to receive profits.
Inflation Risk: Inflation will affect your bond's fixed interest payments.
Taxation: You cannot cheat the government, you have to pay taxes. After paying taxes, you might not have a lot of money left.
Government bonds are safe but may not provide very high returns.

 

[Monster Masterpiece]

I do not think that there are majority but just a small minority because people invest on well known assets and doesn't think a lot of invest on unknown one and do the equivalent research by experience. Add to that tax is only if the asset investment is regulated by the law not the case of all countries.

 

[deucher]

I made my first investments when I was only a student and did not have funds to invest, then I asked friends for funds and promised them that I would definitely earn because it is very easy and even promised them to give more than I took. However, then there was a crash in the Chinese shares where I invested a lot and I got scared and withdrew all the funds and I had to go to work to give them the funds so this is a very bad idea

 

[Monster Masterpiece]

I made my first investments when I was only a student and did not have funds to invest, then I asked friends for funds and promised them that I would definitely earn because it is very easy and even promised them to give more than I took. However, then there was a crash in the Chinese shares where I invested a lot and I got scared and withdrew all the funds and I had to go to work to give them the funds so this is a very bad idea

This is the wrong decision is to borrow for incertain investment this is why it is better to borrow if you are sure you will earn from shares not in incertain behavior for example.

 

[Grant]

With government bonds, you don't get a whole lot back from them from what I remember. I had one when I was a kid, but cashed it out when I turned 18. It resulted in a low return, but I knew that and accepted it. If you can hold onto one for a long time though, you can earn some good interest on it, but I don't think it'll ever reach too high of a price.