By
eHow Personal Finance Editor
Difficulty: Moderately Easy
Things You’ll Need:
- Funds for investing
- Internet access
Instructions
Step1
Determine your investment objectives. Decide your reasons for investing and realize that these reasons may change over time.
Step2
Recognize that US government bond funds are considered relatively safe because the securities are of high credit quality. US government bond funds typically invest in Treasury bills, notes and bonds, mortgage-backed securities from government lending entities, and other asset-related securities.
Step3
Consider the level of risk with which you feel comfortable and remember that the Federal Deposit Insurance Corporation (FDIC) does not insure bond funds. Since all securities fluctuate in value, it is possible to lose money investing in short-term government bond funds.
Step4
Realize that the highest level of risk associated with US government bond funds is due to inflation and changes in interest rates. Assess the level of risk with which you are comfortable.
Step5
Research US short-term bond funds on an investment website, such as Morningstar, a link to which can be found below in the Resources section.
Step6
Determine the amount you'd like to invest in US short-term bond funds. Make sure the amount meets the minimum investment requirements of the fund you are considering.
Step7
Contact your broker or financial advisor to purchase fund shares. Alternatively, you may choose to invest by contacting the bond fund directly.
Step8
Request a prospectus for each fund that suits your investment objectives. Review each one to learn the fund's objectives, charges and expenses, as well as to uncover the risks involved.
Comments
nick582 said
on 7/19/2008 i liked your ideas and advise, thanks for the article. its great.