Bond

Bonds are an asset class commonly referred to as fixed income securities and are one of the three asset classes individual investors are usually familiar with, along with stocks and cash equivalents. Bonds are units of corporate debt issued by companies and securitized as tradable assets. As bonds play a key ingredient in a balanced portfolio, most investment portfolios include bonds which help balance out risk over time. Long-term investment bonds historically earn around 5% in average annual returns, versus the 10% historical average annual return of stocks.