India, March 28 -- Bonds are debt instruments issued by governments, corporations, or municipalities to raise capital. When an investor purchases a bond, they lend money to the issuer, receiving periodic interest payments (coupon payments) and the principal at maturity. Key features include face value, coupon rate, maturity date, and credit rating, which determine the bond's risk and return.

Portfolio diversification is a risk management strategy that involves spreading investments across various asset classes to reduce exposure to any single investment. The core idea is that different assets often react differently to the same economic event. By diversifying, you can minimize the impact of a poor-performing asset on your overall portfol...