B. Investing in Bonds
If you are looking for income from your investments or want to build a balanced portfolio, bonds may be an area worth considering. You lend a company or government money for a set period in return for a fixed income, known as the coupon. This set income means bonds are often called ‘fixed interest’ investments. When the bond matures, you should get your original investment back. Bonds are not designed to produce capital growth, although they can generate a little, so these investments are not really suitable for investors seeking high returns. But they do provide investors with greater protection than shares as bondholders are above shareholders in the pecking order if the company goes bust.