Government Bonds provide long term security and income and you should buy bonds when interest rates on Bonds are high and hold these bonds till maturity. You may have to wait many years to get this opportunity and making money is a waiting game and you may have to hang on to your dear CASH for years.
Bond prices fluctuate and bond prices go up when the interest rates go down. Interest received on the market price of the bond is called Yield.
If Government Bonds are held till maturity you would get your principal back. It is said that compound interest is the eighth wonder of the world and compounding your interest income in Government Bonds is a safe option. It is said that native indians who sold Manhattan island to the Dutch for less than 65 dollars in 1626 would have made substantial wealth in billions of dollars if they had kept their sale proceeds in interest bearing Bonds (@ 7 % or more) and they could have bought the island back after many years of compounding interest income.
The bond screener page in investing in Bonds in the web site www.yahoo.com/financewould give details of yield and safety regarding Bonds available in the market.
There are currency and hyper inflation risks when you invest in bonds in countries with high budget deficits.
If you want to invest in Bonds issued by commercial firms you must ensure they are highly rated (A, AA or AAA) and there are enough profits to cover interest and dividends. A French leader said that others should wake him up from his sleep to tell the bad news and good news can wait till he wakes up. You must get the bad news before you invest and exercising caution would safeguard your funds.
You would need professional help from an experienced and licensed broker who works for a major reputed firm for the selection of specific Bonds.
The web site www.morningstar.com would give you the safety and performance rankings of mutual funds investing in Bonds.
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