What kind of bonds are there?

Question

What are all the major kinds of bonds in the world, and what exactly is a bond?

Are the fixed income, or just low risk?

Answer 1

All Bonds are Fixed Income.  A Bond is nothing more than an (IOU). You give a company, a city, a government, money and they promise to repay you the full amount plus interest. The repayment amount is determined by the Yield and will never change. The face value of the bond will change as its value to maturity changes and how inflation effect that bond. As well as the quality of the issuer who issuer the bond. If the issuer is about to go bankrupt, that bond might be worth pennies on the dollar. If the bond is issued by the US Govt, chances are you'll get your money back unless the country goes belly up.

So lets say Uncle Sam issues a 1yr $10,000 Dollar Bond yielding 5%. You give Uncle Sam $10,000 and he promises to repay you $10,500 in 1/year. Now those repayments might be every month, quarter, bi-yearly, whatever. But in the end, you'll get all your money + $500.  Safe and secure money. Easier than knocking over old ladies. The downside, it'll take you 14yrs to double your money. Now you have to ask yourself if that is worth it, or if you could double your money faster by purchasing Google Stock?