Bonds Explained: How They Work and the Pros and Cons

A bond is essentially a loan. When you buy a bond, you lend money to a government or company, they pay you a fixed interest rate over a set period, and then return your original amount at the end. In this episode, Ryan explains why US government bonds are considered among the safest investments in the world and how corporate bonds offer higher yields in exchange for higher risk.Ryan also covers why bonds belong in most portfolios: they are lower risk and lower expected return than stocks, which is exactly what makes them useful as a stabilizing counterweight. Aaron shares a childhood savings bond story that brings the concept to life. If you have always seen bonds listed alongside stocks but never understood the difference, this episode clears that up.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!