Bonds: The Defensive Corner of a Portfolio
Educational content only — not financial advice. Canada-first. Independent of any brokerage.
What a bond is
A bond is a loan to a government or corporation. You receive interest and principal back at maturity. Price moves inversely to yields.
Why investors hold bonds
Stability, diversification versus stocks, and a buffer during equity drawdowns. They’re not risk‑free but reduce overall volatility.
Risks to know
Interest‑rate risk, credit risk, and inflation risk. Longer duration increases sensitivity to rate changes.
Practical ways to buy
For beginners, broad bond ETFs and short‑duration ETFs are simple options. Laddering GICs or T‑Bills can match short‑term cash needs.