Bonds
Bonds are fixed-income securities that represent a loan made by an investor to a government, corporation, or institution. When you buy a bond, you're essentially lending money to the issuer, who promises to pay interest periodically and return the principal amount at maturity.
Types of bonds include:
- Government Bonds – Issued by governments and considered low-risk.
- Corporate Bonds – Issued by companies, offering higher returns but with some risk.
- Municipal Bonds – Issued by local authorities for public projects.
- Zero-Coupon Bonds – Sold at a discount with no regular interest, maturing at face value.
Bonds are valued for their stability and predictable returns, making them a crucial part of diversified investment portfolios.