Bonds and bond funds allow individuals to diversify their portfolios while mitigating investment risk.
Unlike stocks, bonds typically offer lower returns and don t come along with ownership rights or the chance to win big.
Although stocks tend to garner most of the excitement behind everyday investing, bonds are another major asset class that offer a valuable way to diversify your portfolio.
Bonds are fixed-income securities that represent the ownership of debt and act as loans between a company or government and an investor. They re safer and less volatile than stocks, offering predictable, but often lower returns.
How do bonds work?