What Is Fixed Income? How to Use It for Investing

This article is not about retirement. Although pensions and Social Security are a form of fixed income, this piece will discuss fixed income investments.

They are an important part of the market, and a key part of many long term portfolios. Here's what fixed income investments are and how they work.

What Is Fixed Income?

Fixed income investments pay a regular rate of return on a fixed schedule. A loan upon which someone makes monthly payments with interest is an example of a fixed income investment for the creditor. Every month the borrower pays a set amount of interest and a minimum amount of principle, making payments regular in schedule and form.

The amount of a fixed income investment can vary depending on the nature of the asset. Typically, this happens when the investment is built around percentages of an uncertain quantity. An ETF which returns a percent of assets on a quarterly basis would be an example of a certain schedule, uncertain return fixed income investment. The investor knows when they will get paid and how the ETF will calculate that payment, but the specific amount will depend on fund performance.

Read on (source and credit)

https://www.thestreet.com/investing/fixed-income/what-is-fixed-income-investment-14758617