Understanding Bonds: The Stable Part of Your Portfolio

Bonds are essentially loans you make to a government or corporation for a fixed period at a set interest rate.

Fixed Income

Bonds provide regular interest payments, making them popular for retirees or conservative investors.

Capital Preservation

They are generally less volatile than stocks, acting as a cushion for your portfolio during market downturns.

Interest Rate Sensitivity

When interest rates rise, bond prices typically fall, and vice versa. It's a key relationship to understand.