Bonds are pieces of debt
When a government, company, or similar organization wants to raise money, one way they can do it is by issuing bonds. Basically they borrow money from people, promise to pay them back at some point, and pay interest in the meantime.
Bonds tend to be more stable than shares and also behave differently from them (they have low correlation with shares so their prices don’t often move at the same time in the same direction).
For most investors, that’s pretty much all you need to know about bonds.
If you want to invest in bonds directly, you will need to do a lot more research, but most people just buy bond funds or ETFs, collections of bonds similar to share funds or ETFs.
Bonds are a key part of a balanced portfolio, and we’ll be talking about them later on when we reach passive investing.