Fixed income

Fixed income is a term used to describe a type of financial security that promises to pay fixed sums of cash in the future.

The Bogleheads forum does not have a consensus on the role of fixed income in a portfolio. Fixed income:


 * contains proportions of equities (stocks) and fixed income; where fixed income consists of bonds and cash.

Or,
 * contains proportions of equities (stocks) and fixed income; where fixed income consists of bonds and cash. Additionally, defined benefits (pension) can be considered as bonds.

Or,
 * contains stocks, bonds, and cash. Fixed income not used in this context.

Or,
 * is not defined. Portfolios consist solely of stocks and bonds. Cash is considered as "savings" and not included in the portfolio at all.

Even finance academics are inconsistent in their use of the term fixed income, but there seems to be consistency in the use of the term debt security to describe all debt instruments, both short and long term.

Because of inconsistent usage, specifically the ambiguity as to whether or not fixed income includes money market securities; fixed income is discussed in Debt security.