Note: This article is part of Morningstar's Guide to Dividend and Income Investing special report. A version of this article originally appeared in March 2015.
A bond is a pretty simple investment. Governments and corporations issue bonds to raise money, and in return, they offer bond investors regular interest payments and a return of the principal investment at the bonds' maturity dates. Investors--especially income-seeking investors, such as retirees--like bonds for their steady stream of income and stability when compared with stocks.