3: Being a Lender not a Borrower: The Bond Market

As you saw in Chapter 2, investing in stocks has considerable upside. It sounds exciting because you’re a part owner of a firm. Bonds sound dull and boring by comparison, more like an investment your parents might own. Many people share this view about bonds. The truth is quite different – many types of bonds are available to fit diverse investment styles. Perhaps surprisingly, the bond market is much larger than the stock market. Although bonds don’t get the same amount of media attention as stocks, they can provide steady income and are usually considered safer investments than stocks. Savvy investors realize the benefits of bonds, which are a good complement to equities in their investment portfolio.