If you are new to the world of finance and investments, one of the areas you need to be educated on are bonds. If you are trying to build up a portfolio, bonds are extremely important since during stressed economic times, it is the bonds that will be there to provide stability and possibly keep your portfolio out of troubled waters. Basically, a bond is an IOU that is issued by a government, agency or corporation which covers any money the bondholder has lent out. You are basically a creditor if you have bonds. Bonds may initially not appear to have the attraction and pizzazz that their colleagues stocks enjoy, but nonetheless they are crucial to the economy as well as those seeking to have a well-balanced portfolio.
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