Final answer:
Bonds are typically needed during the investment stage of your financial journey to diversify your portfolio and generate income.
Step-by-step explanation:
Bonds are typically needed during the investment stage of your financial journey, when you are looking to diversify your portfolio and generate income.
Bonds are fixed-income securities that are issued by companies or governments to raise capital. When you purchase a bond, you are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at maturity.
Bonds are considered less risky than stocks and can provide stability to your investment portfolio. They are especially useful during times of fluctuating interest rates, as changes in interest rates can affect bond prices. Generally, when interest rates rise, bond prices fall, and vice versa.