A bond is where you lend money to a company or government, unlike a stock where you are buying a piece of a company (becoming a partial owner).

When you lend money as a bond, you are guaranteed the full amount back once the term of the bond is up for example you might lend the US government money for 10 years by buying a 10 year US Treasury Note, the US government would pay you interest on that bond.

Now you are guaranteed to get your money back after 10 years when your bond matures, but in the meantime you may also sell your bond (you stop receiving interest when you do) but importantly if you sell your bond before it matures you may receive less or more than you originally invested. This is because you are not selling your bond back to the government, you are selling it to another private investor who wants a bond and they may not believe the bond is a good an investment as when you bought it. Consequently if you sell before the bond matures you may receive more or less than you invested originally but if you wait till maturity you are guaranteed to get your money back.

What are the good points about bonds?

Depending on the issuer, they are super secure, arguably US Treasury Bonds or other Bonds issued by AAA rated sovereign nations are as safe an investment as you can get, defaults (the issuer not paying the bond back) are rare but do happen and usually if a country is likely to default on it's debt then it will have a lower credit rating aka Russia might have an ABB rating (random made up example) meaning it has a higher risk of defaulting vs the US which has an AAA rating. The flip side of this coin is that Russia may well offer you a higher rate of interest in order to attract your money, the bond is riskier but the interest rate is better to compensate for the risk.

What are the bad points about bonds?

They don't do well during periods of stability or high inflation relative to stocks and other assets, you may get an interest rate of 4% on your bond, but if the inflation rate is 6% you are losing money.

Why buy bonds?

Because they move in the opposite direction to stocks and most other asset classes, so if the stock market crashes your bonds probably do very well.

Final note, as a general rule of thumb you should invest the same percentage of your portfolio in bonds as your age, aka if your 27 then 27%. This is a rough guide however your circumstances and investing situation may differ.

Hope that helps.