vani

• Oct 31st, 2006

 

Fixed Income

A type of investing or budgeting style for which real return rates or periodic income is received in regular intervals at reasonably predictable levels. Fixed-income budgeters and investors are often one and the same - typically, retired individuals who rely on their investments to provide a regular, stable income stream. This demographic tends to invest heavily in fixed-income investments because of the reliable returns they offer.

Analyst Says:

Individuals who live on set amounts of periodically paid income face the risk that inflation will erode their spending power. Fixed-income investors receive similar set, regular payments that face the same inflation risk.

The most common type of fixed-income security is the bond; bonds are issued by federal governments, local municipalities or major corporations.