Investor Corner/The asset classes

2.2 Debt Concepts

How lending money to a government or company actually works: what a bond promises, how its price moves with interest rates, and the specific risks, credit, liquidity and reinvestment, that come with it. Debt is usually described as the “safe” half of a portfolio, but a bond’s price still moves, and duration, credit quality and reinvestment risk each pull it in different directions. Understanding these mechanics is what separates a genuinely conservative allocation from one that only looks conservative on paper.