Bonds sometimes outperform stocks when a bear market hits, potentially providing a measure of diversification for investors who are attempting to put together more balanced portfolios. Like stocks, bonds can run in cycles, but they’re typically less volatile. Bonds may help you ride out the volatility that the stock market tends to offer, no matter which direction it might be headed. They can also deliver a stream of income, particularly in retirement.īonds tend to be viewed as a more stable and predictable form of investing compared to the stock market. But what are bonds, how do they work, and what role can they play in your portfolio?īonds, a fixed income investment, may play a role in balancing an investment portfolio. Some investors use bonds when attempting to diversify and balance their portfolios. Bonds carry an element of risk, so it’s important to understand how bond ratings work.Learn how interest rate changes affect bond prices and why that might matter to a bond investor.Types of bonds include Treasuries, municipal bonds, savings bonds, and corporate bonds.
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