Business and Personal Finance Dictionary

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• FIXED-INCOME INVESTMENT
  
  Fixed-income investments, such as government, corporate, and municipal bonds, preferred stock, and guaranteed investment contracts (GICs), pay interest or dividends on a regular schedule. In addition, bonds promise return of your principal when the bond matures. A portfolio heavy with fixed-income investments, however, may not provide the protection you need against the effects of inflation, since the rates of return on these securities are generally lower over the long term than the return on more volatile investments, such as common stock. Nonetheless, fixed-income securities provide diversification in a well-balanced investment portfolio and can be a useful source of income.
  
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