Any time is a good time to consider buying bonds

— -- Q: Is today a good time to buy bonds, with all the turmoil going on in the financial markets?

A: Bonds have been and continue to be a critical part of most investment portfolios. Don't let the credit crunch obscure that fact.

Over decades, bonds have offered wonderful diversification for stock investors. For one thing, investors often buy bonds when they get fearful of stocks. This became dramatically clear the week after the collapse of Lehman Bros. Investors couldn't dump stocks fast enough; they piled into Treasury securities issued by the U.S. government seeking safety.

Bonds have a another aspect that is valuable for stock investors. As long as the borrower, say a government, company or other entity, doesn't default, you know exactly when and how much money you can expect to get back. As long as you hold bonds, and don't sell them before they mature, you know what your return will be. That's a welcome investment for those battered by the uncertainty of the current stock market.

In fact, now might be a good time to think about adding bonds to your portfolio if you haven't already. The government's moves to shore up the credit market, as well as declines in some bonds' values, present interesting opportunities. Investment management firm RiverFront Investment Group recently urged clients to become "overweight" in fixed-income investments.

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There are many ways to get involved in the bond market. You can buy individual bonds, but remember, that requires you to do quite a bit of homework on the quality of the bond issuer. You can also buy actively managed bond funds, which employ experts to pick the bonds for you.

But there is a disadvantage to buying bonds though mutual funds and ETFs that is worth pointing out. When you do this, you lose the ability to hold the bonds until they mature. That means you can lose principal, as the value of shares in the bond fund or ETF fluctuate daily.