Diversify and Thrive: 10 Asset Classes Every Investor Should Consider

2. Fixed Income (Bonds)

Bonds are debt securities where investors lend money to entities like governments or corporations. In return, they receive periodic interest payments and the principal amount upon maturity. While they generally offer lower returns compared to stocks, bonds provide stability and predictable income. They act as a cushion during market downturns, making them an essential component for conservative investors.