fixed-income securities such as bonds to protect their investments. This is because bonds are considered safer investment options that provides stable returns, especially during a recession. In this article we will explore why bonds perform well during a recession and the factors that contribute to their success.

fixed-income securities such as bonds to protect their investments. This is because bonds are considered safer investment options that provides stable returns, especially during a recession. In this article we will explore why bonds perform well during a recession and the factors that contribute to their success.

As a reminder, bonds are essentially a loan that is made to a company or government in exchange for a fixed income stream. When investors buy bonds they are essentially lending money to the issuer of the bond. The issuer then pays the investor back with interest over a specified period, usually ranging from a few months to several years. Since the interest payments are typically fixed, bondholders are less exposed to market fluctuations than equity holders, which makes bonds more attractive during periods of economic downturn.

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