Investing in bond funds can be a good business move during unpredictable economic times. Many business investors used to view a low risk bond fund as safe but unexciting. But bond funds are providing record yields for businesses that know how to choose the right ones for their companies.

A corporate bond fund can be a strong component of your company's portfolio, and the right selections won't be risky. The same is true of a government bond fund and a municipal bond fund. All three are relatively "safe" but sure if your strategy is to build income rather than rapid growth. Two other candidates, high yield bonds and junk bonds, offer greater income potential - and increased risks. Once you have a grasp of the basics, you can develop an investment strategy for your company.

As you consider a bond fund investment, take the following into account:

1. There are many types of bonds and nearly as many bond funds.

2. Investment houses offer free or inexpensive investment advice and practice.

3. There are a number of software and online tools to help you keep an eye on your firm's investment.

Action Steps
The best contacts and resources to help you get it done

Learn all you can about the types of bonds and bond funds

Many investment firms offer education as part of their service to customers. At their websites you can find definitions, bond fund histories and glossaries of key terms or receive the same information over the phone or in person. Study the data before investing your company's money.

I recommend: At MutualsAdvisor.com you can register for information on leading bond funds, market trends and similar trading information. eMoney Advisor provides investment training in person or through software.

Take your bond fund ideas for a test drive

Most of investors prefer investing in a mutual fund bond fund that buys bonds as part of a portfolio rather than purchasing individual bonds. You might want to practice your company's investment strategy with a minimal risk bond fund. Use free or reduced-rate trading offers to try out your hand at bond fund investing.

I recommend: You can register at Morningstar.com for a 14-day free trial and unlimited access to more than 2,000 fund analyst reports. Your account at TD Ameritrade will include free analysis of the yield and cost of bonds and several other bond fund tools.

Use available tools to track and analyze your firm's bond fund performance

You can find investment software that can help you stay informed about your company's investment. Similar applications are available online as well. Some will provide recommendations as well as analysis.

I recommend: Beiley Software provides a suite of fund management software. It includes accounting and graphing features, perfect for making presentations on your company's investments. Fund Builder is a basic fund management program that will help you calculate future returns as well as a variety of other functions.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Bond fund managers develop a reputation in the investment business. Research the track records for the managers of funds that interest you.
• •  There are many bond fund choices. As you build your company's investment strategy, don't feel you have to limit investment to a single option.
• •  Management fees and other costs can vary across bond funds. Check and compare before your company invests.