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Understanding Bonds and Their Role in Your Portfolio with Benjamin Bailey

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Sinopsis

Bonds are considered safe investments but also a bit boring. Is that true, though?In the investing world, all the drama, for good or ill, is in the stock market. It’s up, it’s down, you get the picture. However, bonds also have an interesting story, and Benjamin Bailey is here to tell us about it.Benjamin Bailey is Vice President of Investments and Senior Fixed Income Manager at Praxis Mutual Funds, an underwriter of Faith & Finance.Introduction to Bonds and StocksBonds play a unique role in building a well-rounded investment portfolio compared to stocks. Stocks represent ownership in a company—owning a small piece of a business like Verizon or Lowe's. Investors typically buy stocks hoping for price appreciation, aiming to sell them for more than they paid. Bonds, however, function differently. When a large company needs significant funding, they may issue bonds to raise capital, allowing investors to “lend” the company money. In return, bondholders receive interest payments (often bi-annually) and get th