Portfolio Risk & Return

Bonds and Fixed Income

Bonds are loans: the buyer lends money to a government or a company, which pays interest on a set schedule and returns the original sum at the end. Because those payments are fixed in advance, bonds and bond funds are called fixed income. In a portfolio they usually play the steadier role — a lower expected return than stocks, but smaller swings and, historically, often a cushion when stocks fall. US Treasuries, backed by the federal government, are considered the safest from default. The catch is interest rates: when rates rise, existing bonds lose market value (by roughly their duration), and in a year like 2022 stocks and bonds can fall together.

Educational information, not investment advice. See it applied across the screener →