Bonds represent the debts of issuers, such as companies or governments. These debts are sliced up and sold to investors in smaller units.
The bond markets are very liquid and active, but can take second seat compared to stocks for some investors. The bond markets are often reserved for professional investors, pension and hedge funds, and financial advisors, but that doesn't mean that investors should steer clear of bonds. In fact, bonds can play an important part in a portfolio as you age. In fact, having a diversified portfolio of stocks and bonds is advisable for investors of all ages and risk tolerance.