What is a bond?

Investing in bonds is a tried and tested cornerstone of portfolio strategy, but few investors are fully aware of what bonds are and how they work

Close-up bond market trading screen with rising yields and coupon rate data
(Image credit: Torsten Asmus via Getty Images)

Investing in bonds is a means of diversifying a portfolio away from just stocks.

A well-balanced portfolio will likely include a mix of asset classes – some stocks and investment funds, some commodities such as gold or silver, perhaps some real estate, and of course, some bonds.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Dan McEvoy
Senior Writer

Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.