Bonds

A bond is essentially a loan. When you buy a bond, you're lending money to a government or company, who promises to pay you back the original amount later, plus regular interest payments along the way.

Bonds are generally considered lower-risk than stocks, since you know upfront what interest you'll earn (assuming the issuer doesn't default). Many investors hold a mix of stocks and bonds — stocks for growth, bonds for stability — adjusting that balance based on their risk tolerance and how soon they'll need the money.