Bonds are a type of financial instrument popular among investors. Bonds are often called fixed-income investments, meaning that the investor’s returns come from interest payments that do not vary over time. Fixed-income investments vary in maturity - or the length of time before the bond comes due.
Bonds have a specific duration. Investors must be mindful of potential changes in market conditions and interest rates as they choose bonds that match their investment goals and timeline.
Finally, bonds make regular interest payments to investors based on their outstanding principal balance, so investors need to understand how bonds work to maximize their returns.