Fixed Income
Fixed income refers to an investment that provides a fixed return or a regular stream of income to the investor. Examples of fixed-income investments include bonds, certificates of deposit (CDs), money market funds, and preferred stocks.
Fixed income investments, the investor typically receives a fixed amount of interest or dividend payments on a regular basis, based on the terms of the investment. The payments are usually made at a predetermined frequency, such as monthly, quarterly, or annually.
Fixed income investments are generally considered to be less risky than equity investments, as they offer a more predictable income stream and have lower volatility. However, they may also offer lower returns compared to equity investments.
Key Points
- Steady Returns: Fixed income investments provide predictable & regular interest.
- Lower Risk: Generally considered less volatile than stocks, making them a lower-risk option.
- Income Generation: Ideal for investors seeking stable income and capital preservation.