Portfolio
A fixed-income security in which the investor lends money to the issuer for a set term and receives regular interest payments in return.
A bond is a debt instrument. The buyer lends money to the issuer (a government or company) for a fixed term and receives regular interest payments (coupons). At maturity, the face value is repaid.
Bonds are considered less risky than shares but also offer lower return potential. Safety depends on the issuer's creditworthiness: German government bonds are generally considered nearly risk-free, while corporate bonds carry higher risks.
Bonds play an important role in portfolio diversification, as they have historically often shown low or negative correlation with equities.
Related terms
See taxes, dividends and allocation for your whole portfolio in one place.