BrokerHiveXBrokerHiveX
A Complete Guide to Bond Investing | A Core Guide to Fixed Income and Risk Management
2 weeks before
Summary：Is bond investing reliable? How should fixed-income products be allocated? This article comprehensively analyzes the investment logic of Treasury bonds, corporate bonds, convertible bonds, and other products, combining factors such as US Treasury yields, credit risk, liquidity, and global market trends. Furthermore, it provides investors with a professional and systematic guide to risk management and asset allocation, taking into account the market interest rate environment in 2025.
1. The Nature and Function of Bonds
Bonds are fixed-income assets . In essence, investors lend money to issuers (governments, companies), receive interest regularly, and recover the principal upon maturity.
Robust properties : Compared with stocks and digital currencies, bonds have lower volatility.
Portfolio value : Bonds are often used to hedge against the risk of falling stock markets and are a typical asset allocation tool.
Various categories : including government bonds, local government bonds, corporate bonds, financial bonds, convertible bonds , etc.
2. Core Classification of the Bond Market
| type | Features | Suitable for people |
|---|---|---|
| government bonds | The lowest risk, with yields guaranteed by national credit (such as US Treasury bonds and German bonds) | Risk-averse, retirement allocation |
| corporate bonds | Higher returns, but with default risk | Conservative and aggressive investors |
| convertible bonds | It has both debt and equity characteristics and can be converted into stocks | Investors who seek stability with a touch of aggressiveness |
| High-yield bonds | Also known as junk bonds, with high default rates and high interest rate compensation | High-risk appetite investors |
| Municipal bonds | Issued by local governments, with tax incentives (such as US local bonds) | People who are interested in long-term financial management and tax planning |
3. 2020–2025 Market Data and Case Studies
2020–2021 : During the epidemic, the Federal Reserve cut interest rates sharply, and the yield on the 10-year U.S. Treasury bond fell to a historic low of 0.5% .
2022 : To combat inflation, the Federal Reserve aggressively raised interest rates, pushing U.S. Treasury yields up to 4.2% .
2023 : U.S. Treasury yields briefly inverted, raising market concerns about a recession.
2024 : The world enters a period of stable high interest rates, and the cost of corporate bond financing rises.
August 2025 : The yield on the 10-year US Treasury bond is around 3.9% , the yield on the 10-year Chinese Treasury bond is around 2.5% , and the Eurozone maintains low interest rates. Bonds are gaining renewed attention in global asset allocation.
IV. Main Risk Dimensions of Bonds
Interest rate risk : When interest rates rise, bond prices fall; when interest rates fall, bond prices rise.
Credit risk : Corporate default or rating downgrade may result in loss of principal.
Liquidity risk : Some bonds have low trading volumes and are difficult to sell.
Inflation risk : If inflation exceeds the coupon, the real yield may be negative.
Exchange rate risk : Overseas bond investments may be affected by exchange rate fluctuations.
5. Bond Investment Practice and Allocation
Recommended asset ratio :
Conservative: 50–70% bonds.
Balanced: Bonds account for 30–50% .
Aggressive: Bonds account for 10–20% , with more funds flowing into stocks/digital currencies.
ETF and fund channels : Reduce the risk of individual bond defaults by investing in bond ETFs and bond funds.
Duration management : Adjusting short-term or long-term bond allocation based on interest rate expectations.
Credit diversification : Avoid concentrated purchases of single corporate bonds and prioritize high-rated bonds.
VI. Future Trends and Outlook
Changes in the interest rate cycle : If global central banks enter an interest rate cut cycle in the second half of 2025, long-term bond prices may strengthen.
Green bonds and sustainable finance : The scale of ESG bonds has grown rapidly, becoming a focus of capital pursuit.
Digital bond market : blockchain bonds and central bank digital currency drive cross-border settlement.
The rise of Asian bond markets : China and Southeast Asian markets are gradually attracting global capital and becoming an important source of diversified investment.
🔹 Overall Conclusion
As a stabilizer and risk hedging tool , bonds will remain a key component of the investment portfolio in 2025.
Investors should focus on the three core factors of interest rate cycle, credit risk, and asset allocation ratio , and build a robust fixed income investment system by combining tools such as ETFs, funds, and direct investment in government bonds.
⚠️Risk Warning and Disclaimer
BrokerHivex is a financial media platform that displays information sourced from the public internet or uploaded by users. BrokerHivex does not endorse any trading platform or instrument. We are not responsible for any trading disputes or losses arising from the use of this information. Please note that the information displayed on the platform may be delayed, and users should independently verify its accuracy.
