Photo courtesy of JHerbstman on WikiMedia Commons
What do you know about bonds? Not James Bond, investment bonds. If you guessed "something having to do with the stock market," you're on the right track but not completely there!
When you invest in stocks, you know that you own a piece of the company’s value. When the demand for that stock increases, the market value goes up. If you sell when the market value is high, you make a profit.
When you invest in bonds, they are much like loans with you acting as the bank. You get a certificate showing that a business, city, or government owes you money to repay you for your investment in their spending on growth, equipment, construction, and other projects. When your bonds mature, you can cash them in for more than you paid for them.
So what does that mean for you? Are bonds a good option for your investment portfolio? Keep reading to find out!