Bond and Mutual Fund are the mix of investment for his retirement saving.
A bond is a fixed-income and it represents a loan from an investor to a borrower. Bonds are mostly issued by states, companies, governments, and municipalities to finance their operations and projects. The issuer of the bond is the creditor and the owner is the debt holder. While in the mutual fund, the company pools the money from many investors and then invests that money into other securities such as bonds, stock, and short-term debt. It is an effective way to directly invest in a mutual fund to save for retirement. Because it has very low risk if a company in the portfolio of mutual fund get loss or even fails, then it would be very less effect on the investor since their money is spread across many companies. Therefore, both bonds and mutual funds are very low-risk options for the investor for retirement investment.
Other options are incorrect because:
Future and saving accounts: these are the financial contract between seller and buyer to buy or sell an asset at a predetermined future price and date regardless of the current market price. These are considered advanced trading instruments and are generally traded by experienced investors. While saving accounts are the interest-based deposit accounts generally opened at the financial institution or at banks. Though saving accounts pay a modest interest rate and it is a great option to keep cash for short-term needs.
Stock and mutual funds: stocks represent ownership in a company or business. When you buy the stock there is no guarantee of profit and a negative drop in stock in the market may cut into an investment which makes it one of the riskiest investments for the investor.
So stocks and futures are both considered the riskiest investment and it is usually traded by experienced investors. These types of investments are not ideal for inexperienced individual for their retirement investment.
therefore, the option bonds and mutual funds are the best option for individual's retirement investment.
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