Investing term

What is Bond?

A loan from you to an issuer (government or company), repaid with interest on a known schedule.

A bond is a loan you make to a government or company. In return the issuer pays you regular interest (the coupon) and repays the original amount (the face value) on a set date (maturity). Bonds are generally steadier than stocks and provide predictable income, which is why they're the classic ballast that cushions a portfolio when stocks fall.

For example

Buy a $1,000 bond paying a 4% coupon and you collect $40 a year, then get your $1,000 back at maturity — assuming the issuer doesn't default.

Bond is taught hands-on in Stage 4 — Stocks, Bonds, Cash & Alternatives.

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Related terms

AlternativesInvestments outside the core stocks/bonds/cash mix — REITs, commodities, gold, crypto.Capital gainThe profit from selling an investment for more than you paid.CommodityA raw physical good like gold, oil, wheat, or copper — priced by the ounce, barrel, or bushel.CorrelationHow tightly two investments tend to move together, measured from +1 (identical moves) to −1 (opposite moves).
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