Bonds

A bond is a loan that is made to a government (like the United States), a city municipality, a corporation, or any other legal entity that might need to borrow money for some reason. It is not the same as buying stock in a company because it is a loan that is paid back, with interest. If you decide to buy a bond, the price you pay will vary. Some bonds sell at discounts or premiums to face value depending on many variables. A typical bond will pay you interest until the bond matures, when you will be paid back your initial investment. I personally include bonds in my investment mix because I want to be diversified.