Money market portfolios are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Bonds represent the debt issued by governments and corporations. They are agreements to repay the debt at a set rate of interest in a predetermined period of time. The risk involved with bonds varies depending on who is issuing them. Bonds are generally considered a less risky option than stocks, but more risky than money market investments.
Bonds are more sensitive to interest rate fluctuations than stocks.
Most bond funds will have a mix of high quality bonds, like those issued by the U.S. government and blue-chip companies that pay lower rates of interest, and lower quality bonds that pay a higher rate of interest. Balanced or Asset Allocation Investments. These portfolios comprise a blend of stocks and bonds. Accordingly, their risk-reward ratio generally is somewhere between stocks and bonds. Indexes are common measures of sectors of the stock market's performance.