Bonds are commonly referred to as fixed-income securities and are one of the main asset classes that individual investors are usually familiar with, along with stocks (equities) and cash equivalents.
Basic characteristics of Bonds including: Face value (par value) is the money amount the bond will be worth at maturity;The coupon rate is the rate of interest the bond issuer will pay on the face value of the bond, expressed as a percentage;The maturity date is the date on which the bond will mature and the bond issuer will pay the bondholder the face value of the bond;The issue price is the price at which the bond issuer originally sells the bonds. In many cases, bonds are issued at par.
In return for buying the bonds, the investor – or bondholder– receives interest payments known as a coupon.This leads to apredictable income to the investor.
If the bonds are held to maturity, bondholders get back the entire principal, so bonds are a way to preserve capital while investing.Bonds can help offset exposure to more volatile stock holdings.
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Bonds are a way to preserve capital while invsting.
