Debt securities issued by governments, municipalities, or corporations to raise capital, with a promise to pay back with interest.
Characteristics:
- Regular and Taxable interest payments (coupons)
- Variety of types: government, corporate, municipal
- Fixed maturity date
- Lower risk compared to equities
Portfolio placement :
Bonds are ideal for income generation and risk diversification. Government bonds are safer, while corporate bonds offer higher returns. They can be a stable, income-generating component in a portfolio.