Stable Returns:

Bonds generally offer more predictable and stable returns compared to stocks. This stability helps lower the overall volatility of a portfolio, especially during market turbulence.

Interest Payments:

Bonds pay regular interest, which provides a steady income stream and reduces reliance on capital gains for returns.

Different Asset Class:

Bonds often behave differently from stocks. When stocks decline, bonds may hold their value or even increase, providing a counterbalance that reduces the portfolio’s overall risk.

Negative Correlation:

In many cases, bonds and stocks have an inverse or low correlation. This means that when one asset class underperforms, the other may perform well, leading to more balanced portfolio performance.

Safer Investments:

Bonds, particularly government and high-grade corporate bonds, are generally considered safer investments. They are less prone to significant price swings compared to equities.

Return of Principal:

Upon maturity, bonds return the principal amount invested, ensuring that investors recover their initial investment, which reduces the risk of loss.