Cooking is the science - and art - of combining different ingredients together to create something that nourishes our body and also pleases our palete. Some might say that cooking is more art than science and that investing is more science than art. One of the ingredients in our investing recipe is bonds. Like the food pyramid, they can be thought of as the layer just above the base (cash) that tends to keep our financial world from toppling over. What Is A Bond? A bond - or fixed income instrument - is essentially an IOU. It is inevitable for some embarrassed student to forget their lunch money on the first day of school. Those of us who had enough spare change might loan money to our new classmate and request that they give us a cryptic note documenting their name, the date, and the amount owed back to us. A bond is a similar "contract" where the borrower (that poor kid) agrees to pay back the principal (the amount borrowed) plus some interest. The interest rate charged may