What Is Fixed Income?
Bonds can diversify a portfolio and provide steady returns, but it’s important to research the risks involved before investing.
Bonds are debt securities that represent a loan from an investor to a borrower. The bonds are issued by the borrower, typically in exchange for money, and they typically have a fixed term during which the borrower must repay the loan. Bonds can be used by companies, governments, or other entities to raise capital. Bonds are often seen as a safe investment because they typically offer fixed interest payments and terms. However, bonds can also be risky, and it is important to understand how they work before investing.
Types of Bonds
There are four main types of bonds: corporate bonds, municipal bonds, Treasury bonds, and junk bonds. Each type of bond has its own risks and rewards.
Corporate Bonds
Corporate bonds are issued by companies in order to raise capital. These bonds are typically considered to be relatively safe, but there is always the risk that the company will default on the loan.
