Bonds are a popular fixed-income investment that can offer a steady stream of income and lower risk compared to stocks. This post will explain what bonds are, how they work, and why they might be a good addition to your investment portfolio.
What Are Bonds?: Bonds are debt securities issued by governments or corporations to raise capital.
Fixed Income: Bonds pay a fixed interest over time, making them a predictable income source.
Bond Types: Common types include government bonds, municipal bonds, and corporate bonds.
Risk vs Reward: While lower risk, bonds typically offer lower returns compared to stocks.
Maturity and Yield: The bond’s yield is the return you earn, and maturity is the period after which the principal is repaid.
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