Bonds represent a loan made by an investor to a borrower, typically a corporation or government entity. Bonds are a type of fixed-income security that provides regular interest payments over a specified period, with the principal amount repaid at maturity. Individual bonds are bonds that are not part of a larger bond issue and are typically issued by smaller companies or municipalities. They often have higher yields than larger, more liquid bonds, but they also carry more risk.
There are several benefits to buying individual bonds. First, they can provide a higher yield than many other types of fixed-income investments. Second, they can help to diversify a portfolio and reduce overall risk. Third, they can provide a steady stream of income over time. However, it is important to remember that individual bonds are not without risk. The issuer of the bond could default on its obligations, or the value of the bond could decline due to changes in interest rates or other factors.