Why do performance bonds matter to investors?
Although performance bonds generally don't directly affect investors, it is important for anyone investing in real estate, real estate investment trusts (REITs), government bonds tied to construction projects, and similar situations to know that their money is protected, even if the contractor disappears.
In this way, performance bonds are a risk mitigation tool, even if you're not fully in on the details of the agreement. Just knowing that your investments are backed by performance bonds and other surety bonds can make it easier to put your money into less risky construction projects that are likely to be finished at or below budget.