What are fixed income securities primarily used for?

Fixed income securities are primarily designed to provide regular income and preserve capital, making them a key component of many investment portfolios. These securities, such as bonds or treasury bills, typically pay a fixed interest rate over a specified period. Investors are attracted to fixed income securities because they offer stability and predictability in cash flows, which is particularly important for those seeking to preserve their capital, such as retirees or conservative investors.

The regular income generated from these securities can be a reliable source of cash flow, allowing investors to meet their ongoing financial needs without exposing themselves to the volatility often seen in equities or other high-risk investments. Additionally, because fixed income securities generally have a defined maturity date, they can be used to match specific financial goals or liabilities, further contributing to capital preservation.

In contrast, the other options focus on aspects that do not align with the fundamental purpose of fixed income investments. High-risk returns, speculative investments, and ownership in companies are typically more associated with equities, speculative plays, and other high-risk asset classes, which are distinct from the primary objectives of fixed income securities.