Bonds

A bond is a certificate of debt issued by the Federal government, states, cities, corporations, and many other institutions to raise capital by borrowing. When bonds are issued, the issuer promises to pay the full value plus regular interest by a specified future date, regardless of market volatility.

There are three potential advantages to investing in bonds:

1. Stability.
   
2. Preservation of Wealth.
   
3. Steady Income.

Many bonds are not insured and may lose value or default on interest payments. If sold prior to maturity, you may receive less than face value. Some government bonds pay all interest at maturity, but you will be taxed on it annually.