06/01/2026
When you buy a bond, you’re not buying ownership — you’re lending money.
In return, the issuer agrees to pay you interest (called a coupon) and repay your principal at maturity
Bonds are often used to provide:
🔹 Predictable income
🔹 Capital preservation
🔹 Diversification
🔹 Reduced portfolio volatility
They can also serve as a stabilizing force during periods of market stress, helping offset equity risk
But bonds are not risk-free.
Bond prices move inversely to interest rates — when rates rise, prices fall
Investors must also consider:
🔸 Inflation risk
🔸 Credit/default risk
🔸 Liquidity risk
Bonds may not generate the same growth as stocks — but they play a critical role in protecting wealth and generating income within a thoughtful allocation strategy
If your portfolio is all growth and no guardrails, volatility may hit harder than you expect.
Balance isn’t boring. It’s strategic.
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