Return and liquidity combined
A bond, or debenture, is a long-term debt security issued by a private company or a government body. The issuer guarantees the repayment of the principal plus interest at maturity.
The interest paid generally depends on the quality of the issuer, expressed by its rating, the maturity, the currency and the liquidity. For ‘plain vanilla’ issues, the interest is fixed for the whole term to maturity, regardless of market fluctuations.
Bonds are a good way to diversify your investments, given the wide range of issuers in different countries and sectors. They are generally liquid thanks to an efficient secondary market, and they can be used as collateral.