Why Own Bonds?

Diversification
Higher quality bonds play an integral role in any investment portfolio. Because they don’t typically move in tandem with equities, they may help lower risk in a stock-heavy portfolio, and potentially enhance a portfolio’s overall returns.

Income
Fixed income securities generally make regularly scheduled interest payments over a set period of time—typically at rates above those of cash equivalent investments such as money market funds. Steady and predictable payments make them particularly attractive to retirees and investors looking to augment their income, and may help offset losses in other parts of their portfolio.

Opportunity
At times, different sectors of the financial markets will be more attractive than others. As economic factors shift, investors may want to own securities representing those parts of the market that have the potential to offer strong returns.

Bonds can add a measure of stability to a diversified portfolio, while potentially delivering steady income.