What are bonds? Think of them like an I.O.U.—when you purchase a bond, you lend money to entities like corporations and federal, state, and local governments, with the understanding that you’ll earn that money back (with interest) after a fixed period of time. Watch this video featuring Head of Portfolio Strategy for Goldman Sachs Personal Financial Management Group Investments Mariam Kamshad to learn more about how bonds fit into a diverse investment strategy.
Bonds accrue interest under a specific set of borrowing terms and can provide a predictable stream of income
When a bond matures, you get back the original amount you invested—plus interest
Bonds can help diversify and spread risk in a portfolio