Bonds are debt instruments and represent loans made to the issuer. Governments (at all levels) and corporations commonly use bonds in order to borrow money. Bonds are a type of security sold by governments and corporations, as a way of raising money from investors. From the seller’s perspective, selling bonds is therefore a way of borrowing money. From the buyer’s perspective, buying bonds is a form of investment because it entitles the purchaser to guaranteed repayment of principal as well as a stream of interest payments. The bond market tends to move inversely with interest rates because bonds will trade at a discount when interest rates are rising and at a premium when interest rates are falling. They provide a predictable income stream and can help offset exposure to more volatile stock holdings.