Bonds
Loans to governments or companies that pay interest.
A bond is a loan you make to a government or company. In return, it pays you interest and returns your money at the end of the term.
Their role in a portfolio
Bonds usually grow more slowly than stocks but swing less, so they cushion a portfolio during stock market drops. That is why most plans add more bonds closer to retirement.
Bond prices move opposite to interest rates: when rates rise, existing bonds lose value, and the reverse.