Bond investing is something every new investor should understand. Whether you are building a specific 3 fund portfolio, or simply deciding on your asset allocation, the types of bonds you choose matter.
From government bonds to corporate bonds, they all play a similar role in your portfolio – diversification. However, there are distinct differences between them, and understanding those differences can help you decide how to get started.
Before highlighting three major types of bonds, we’ll start with the basics, what is a bond?