Unlike stocks, bonds don’t give you ownership rights. They
represent a loan from the buyer (you) to the issuer of the bond.

Bonds are issued by governments and corporations when they want to raise money. By
buying a bond, you’re giving the issuer a loan, and they agree to pay you back the face
value of the loan on a specific date, and to pay you periodic interest payments along the
way, usually twice a year.

Unlike stocks, bonds issued by companies give you no ownership rights. So you don’t
necessarily benefit from the company’s growth, but you won’t see as much impact when
the company isn’t doing as well, either—as long as it still has the resources to stay
current on its loans

Bonds, then, give you 2 potential benefits when you hold them as part of your portfolio:
They give you a stream of income, and they offset some of the volatility you might see
from owning stocks.

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