Chapter 2. Basics of Bond Investments

If you are planning for retirement, you want to be able to sleep well at night without having to worry about whether your investments will pay you enough to live on. A thoughtful program of investing in bonds can help you achieve this peace of mind. This chapter explains what bonds are, how they work, and why they are usually (but not always) safe. This chapter covers several different types of bonds. Some offer absolute safety but relatively low returns, whereas others offer very high-potential returns but with significant risk. Some or all of these bonds have a role in your investment program.

What Is a Bond?

A bond is a loan that an investor makes to a business or government. Bond investors make loans, ...

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