Fixed-income investments, such as government and corporate bonds, can provide a steady, predictable source of income, often with lower risk than other investments. Along with stocks and stock mutual funds, fixed-income investments make up the backbone of a well-diversified investment portfolio.
What is fixed-income investing?
Unlike many types of investments, fixed-income investments don’t need to be sold to generate a profit. To illustrate how this works, let’s look at one of the most common types of fixed-income investments: bonds.