A: Bond is a kind of product which is different from any other asset category, for instance investment in a real estate or in gold or in the share market. When the price goes down of any of these products, you never know when the price is going to come back. The beauty of the bond product is suppose you are holding a bond and if the price of the bond fall, it mean from tomorrow the yield will start going up. So, suppose you are holding a 10-year bond of 8 percent and tomorrow interest rate goes up to 9 percent, so immediately you will see depreciation in net asset value ( NAV ) but from that day onward yield instead of 8 percent it will start from 9 percent. So, in a bond if you hold till maturity then there is no way you are going to lose capital if you are invested in a good quality bond. So, when you look at investing in bond and I am not restricting myself to the bond but the whole fixed income space one need to invest.
Many people go on lend money to their friends and in the businesses extremely risky. People invest in company deposits - extremely risky. When people look at investing in the bond, I think what happens in bond that it has a coupon which keeps coming to you on regular basis. So, in a way it is a very good tool for customer to invest and it give a protection to the customer's portfolio, it provides regularity of income and in a way it is a very essential part of any customer's portfolio.
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