What are some of the benefits of bonds as an investment?

Bonds are a great way to diversify a portfolio and provide a steady flow of income for investors. They are a type of fixed income security, meaning that the investor and borrower have an agreed-upon interest rate, payment schedule, and face value of the bond from the onset of the investment. With bonds, there is also a degree of protection from the movement of stock markets, as bond prices tend to be less volatile than stocks, meaning that bond holders may experience minimal to no losses during a downturn in the stock market. Additionally, interest payments are generally not subject to taxes until the bond is sold, meaning investors can benefit from tax deferment. Additionally, bonds tend to retain their value better than stocks, and generally provide a higher level of security considering they are backed by the underlying issuer, typically either a government or company.