Bonds: Stability and Predictable Returns

Bonds: Stability and Predictable Returns

Overview:
Bonds are essentially loans that you give to governments or corporations. In return, they pay you interest at regular intervals until the bond matures.

Why It Matters:
Bonds are a go-to for conservative investors seeking stable income with lower risk.

Key Benefits:

• Fixed income

• Lower risk than stocks

• Diversification tool

Risks:

• Inflation can reduce real returns

• Credit/default risk

• Interest rate risk