Fixed Income

Fixed Income refers to a type of investment that provides Returns in the form of regular, fixed payments and the eventual return of principal at maturity. These investments typically include Bonds, loans, and other debt instruments where the issuer agrees to pay a specified amount of interest at regular intervals and return the principal at the end of the term.

Examples:

• Corporate Bonds: A company issues Bonds that pay 5% interest annually for 10 years.
• Government Bonds: U.S. Treasury Bonds that pay a fixed Interest Rate over a specified period.
• Municipal Bonds: Bonds issued by local governments to fund public projects, often offering tax-free interest.

Cases:

• Retirement Planning: Investors seeking stable income during retirement often allocate a portion of their portfolio to fixed income Securities.
• Risk Management: Investors may use fixed income Assets to balance the volatility of equities in their investment portfolios.
• Interest Rate Environment: In a low-interest-rate environment, fixed income Returns may be lower, leading investors to seek higher-yielding Options or diversify into other Asset-classes/">Asset Classes.