How can you compound money using bond investments?

We normally consider equities once we need to make investments for the long term, since equities compound over time. However fixed-income investments compound too; with lesser volatility and subsequently lesser threat. Investments in long-term debt funds can see marked-to-market losses in brief time period, but when held for lengthy, they are often good compounder of cash. Because the positive factors are taxed at 20 % with indexation for items held for greater than three years, the returns are tax-efficient too. Due to this fact, in our asset allocation, we should embody debt funds. Simply that debt funds are usually used for shorter to medium-term objectives. The most effective strategy is to begin a scientific funding plan.


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