Bonds

A bond is a loan made by an investor to a government or company, which usually pays interest and returns the original amount at a set date. Bonds are often seen as a steadier part of a portfolio, though they carry their own risks.

Bond prices and yields respond to interest rates and to the borrower's perceived reliability, which can make them less intuitive than they first appear. FinanceFlexHub explains how bonds work, why their prices move and the role they can play alongside other investments.