Investors can buy bonds either through a broker or directly from the issuing entity. When buying bonds through a broker, it’s essential to check that the broker is regulated by a top-tier authority (i.e. the FCA in the UK, the SEC in the US or BaFin in Germany), it charges low fees for its services and it offers investor protection.

Bonds are especially favored by conservative investing strategies, as they are relatively safe. Their returns, while often lower than that of other asset classes such as stocks, are reasonably predictable. It’s easy to learn how to buy bonds via online brokers, though you should be aware of potential risks such as inflation risks or the possibility of default.

Bonds are generally viewed as a safe investment, but they are far from entirely risk-free. Some of the most common risks associated with bonds are the default risk and inflation risk. These are primary concerns for bond investors who hold a bond until maturity. Other risk types such as downgrade risk, liquidity risk, exchange rate risk or interest-rate risk will typically affect bond traders active on the secondary market.