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INVESTING

Bonds & Fixed Income

Yields, duration, credit, and the fixed-income markets that anchor diversified portfolios.

A bond is a loan an investor makes to a government or company in exchange for regular interest payments and the return of principal at maturity. Bond prices move inversely to interest rates — when rates rise, existing bonds with lower fixed payments become less attractive and their prices fall, and the size of that swing is measured by duration, with longer-maturity bonds generally more rate-sensitive than shorter ones. Credit ratings from agencies like Moody's and S&P gauge the issuer's ability to repay, separating investment-grade debt from higher-yielding, higher-risk 'junk' bonds. Because bonds typically move differently than stocks, especially during equity downturns, they're commonly used to reduce overall portfolio volatility rather than purely to maximize returns.