When many people think about investing, the first thing that comes to mind is the stock market.
But if you’re going to achieve your goals, you may need to look beyond stocks and add fixed-income investments to your portfolio.
These fixed-income securities, such as corporate and government bonds and CDs, offer three key benefits.
First, when you invest in bonds, you receive a regular source of income in the form of interest payments.
And you get these fixed payments until the bonds mature.
Second, bonds and other fixed-income investments can help diversify a portfolio that may be overweighted toward stocks.
And while diversification can’t always prevent losses, fixed-income investments can help reduce the effects of market volatility.
Finally, because bond prices are typically less volatile than stocks, they can help provide stability to your portfolio.
The amount of your portfolio devoted to bonds will depend on your individual situation.
But the combination of income, diversification, and stability should be compelling enough for you to find a place for bonds in your mix of investments.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
