Bonds offer a predictable income stream from interest payments (a.k.a. “coupon”) that investors can expect to receive in regular intervals. The exact payment period depends on the bond, with quarterly, semiannual, or annual being the most common.
Bonds are generally considered less volatile than stocks. This means that their price tends to not change as often and as much as the price of a stock in the short term. This characteristic can make them a preferred choice for more risk-averse investors.
Bonds can also offer important diversification opportunities for investors who already invest in other asset classes. Case in point: As bond and stock prices tend to move in opposite directions, adding bonds to your overall portfolio can soften the impact of a drop in the stock market.
Investing in bonds on Mintos could be interesting for you if the following goals resonate with you:
- You want to earn a fixed passive income to reach your financial goals.
- You want to invest in a less volatile asset class.
- You want to diversify your portfolio across asset classes.