Bonds are a type of debt instrument in which a creditor agrees to loan some money to a debtor for a period of time in exchange for interest and a return of principal. Corporations issue bonds to cover short-term expenses and fund expansions and mergers.

If a corporation goes bankrupt, claims of bondholders take precedence over stockholders as creditors have to be made whole before individuals with ownership stakes in the company can receive any money from the sale of its assets. Governments around the world issue bonds to pay for day-to-day administrative costs and to finance long-term projects such as the construction of roads.

Federal Government Bonds

The United States federal government issues a variety of different bonds some of which investors can buy on the secondary market. Short-term bonds known as Treasury bills mature in less than a year, Treasury notes mature after ten years and Treasury bonds last for 30 years.

• High Investment Stock Yield

• Helly Hansen Investcorp

• Couch Potato Investment

• Investthree

  Tom Bulford outlines three stockmarket signals that should keep you one step ahead of the market's movements.

• Investor Bank Technology