Fixed income is the broad name for debt investments that usually pay interest on a set schedule and return principal at maturity. Bonds, treasury bills, and many bank certificates fall in this family. Returns are more predictable than equities in normal times, but prices still fall when interest rates rise, and default risk never disappears.
Key takeaways
- Fixed income is still risky: rates, inflation, and credit quality all matter.
- It often plays a stabilising role beside equities in a mixed portfolio.
- “Fixed” refers to the payment schedule, not to a guaranteed real return after inflation.
- Compare yields only after adjusting for maturity, credit risk, and fees.