At Baron Financial Group, our financial advisors will work with you on different investment strategies and help you further define what you want your financial future to look like. An investment in bonds may be a part of that strategy. A bond is a debt investment where investors loan money to a corporate or governmental entity, which borrows the funds for a defined period of time at a variable or fixed interest rate.
Owners of bonds receive interest payments at fixed intervals. When the bond comes to maturity, the principal is repaid. If you are keeping a diversified mix of investments, bonds may make the perfect addition. While stocks can experience volatility, a diversified bond portfolio is much less likely to suffer losses in a short period, and will often help you move closer to your goals.