The Bond Market: Everything You Need to Know

Learn about the different kinds of bonds and the pros and cons of investing in the bond market.

By Jeremy Bowman – Updated Jul 25, 2025 at 8:59 PM | Fact-checked by Frank Bass

Key Points

The global bond market value at $140.7 trillion exceeds the global equity market at $115 trillion.
Bonds, offering fixed income, bought/sold over-the-counter, are less volatile than stocks.
Investing in bonds: options include government, municipal, corporate, and mortgage bonds.

You might think the stock market is huge, but the bond market is even bigger. According to the Securities Industry and Financial Markets Association (SIFMA), the global bond market was worth $140.7 trillion at the end of 2023, compared to the $115 trillion global equity market cap.

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Bonds

Bonds are debt securities that entitle the holder to receive interest payments.

Although some stock investors may ignore the bond market, fixed-income markets influence the stock market, since bonds compete for investment dollars with stocks and the overall economy. So it's important to understand the bond market even if you have no intention of owning bonds.

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An infographic explaining the difference between the primary and secondary bond market. — Image source: The Motley Fool.

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If you are considering investing in bonds, there are a number of different options at your disposal, including corporate bonds, municipal bonds, Treasuries, mortgage bonds, and others. In this deep dive into everything about the bond market, we'll review the different kinds of bonds, how the bond market works, how it compares to the stock market, and the pros and cons of investing in the bond market.

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Bonds can be bought and sold in two different ways -- through the primary market and in the secondary market.

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Primary market

The primary market refers to new issues of bonds. This is where bonds are originated. If you are buying a bond in the primary market, you are buying it directly from the seller, which could be a company, a government, a bank, or another financial entity that may create a financial product such as a mortgage bond.

Secondary market

On the secondary markets, bonds are bought and sold between investors through a broker. In a sense, bonds on the secondary market are traded like stocks, from investor to investor rather than from the borrower or company. Although bond prices and bond yields can change over time, their coupons and maturities do not, which means bonds generally tend to be less volatile than stocks.

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Table by author.

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Bonds vs. Stocks: What's the Difference?

Investing in stocks and bonds can help to build wealth for anyone with disposable income. Read about the differences between them.

What Is a Bond Rating?

A bond's rating can say a lot about a particular security and its investment risk level.

How to Invest in Green Bonds

Green bonds finance eco-friendly projects. Learn how they work, their benefits and risks, and how to invest in them.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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