Mammoney - Your Ultimate Guide to Personal Finance & Investing

Bonds are an essential component of a diversified investment portfolio, offering stability and predictable returns. This guide will help you understand the basics of bonds and how to get started with fixed-income investing. Introduction Bonds are debt securities issued by governments, municipalities, and corporations to raise capital. When you invest in a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the principal amount at maturity. Bonds are considered a safer investment compared to stocks, making them an attractive option for conservative investors. This guide will cover the fundamentals of bonds and how to invest in them. Types of Bonds There are several types of bonds, each with its own characteristics and risk levels: Government Bonds : Issued by national governments, these bonds are considered low-risk investments. Examples include U.S. Treasury bonds, notes, and bills. Municipal Bonds : Issued by state and loc...