Fixed-income investments

These investments pay a fixed amount according to a set schedule, and are usually issued by a corporation, municipality, government or government-sponsored agency.

Fixed-income investments such as bonds and guaranteed investment certificates (GICs) are an important part of a well-diversified portfolio. Fixed-income investments pay interest at specified times in fixed amounts and are usually issued by a corporation, municipality, government or government-sponsored agency.

There are two primary reasons why investors may want to include fixed-income investments in their portfolio:

Income – Fixed-income investments provide a stable and regular stream of income.
Diversification – Fixed-income and equity (stock) prices tend to move in different directions over time, which can help smooth out your investment performance.

Important Information:

Before investing in bonds, you should understand the risks involved, including credit risk and market risk. Bond investments are also subject to interest rate risk such that when interest rates rise, the prices of bonds can decrease, and the investor can lose principal value if the investment is sold prior to maturity.