Fixed-income securities are debt instruments that pay investors a fixed stream of income over a specified period of time.
Some common types of fixed-income securities include:
● Government bonds
● Corporate bonds
● Municipal bonds
● Certificates of deposit (CDs)
● Treasury bills
Fixed-income securities are popular with a variety of investors, including individuals, institutions, and pension funds.
Fixed-income securities offer a number of benefits, including:
● Predictable income
● Relatively low risk
● Diversification
Some of the risks of investing in fixed-interest securities include:
● Interest rate risk
● Credit risk
● Inflation risk
You can mitigate the risks of investing in fixed-income securities by:
● Investing in a diversified portfolio of fixed-income securities
● Investing in bonds with different maturities
● Rebalancing your portfolio regularly
There are a number of resources available to learn more about fixed-income securities, including books, websites, and online courses. You can also consult with a financial advisor to get personalized advice.
A bond is a debt instrument, while a stock is an equity instrument. This means that bondholders are creditors of the company that issued the bond, while stockholders are owners of the company.
The yield on a fixed-income security is the return that an investor can expect to receive if they hold the security to maturity.
The credit rating of a fixed-income security is an assessment of the issuer’s creditworthiness. Credit ratings are assigned by credit rating agencies such as Moody’s and Standard & Poor’s.
