As an illustration of the return and risk situation for an investor who is seeking steady returns, consider long‐term Treasury securities for the period 1926–2010. The securities have no practical risk of default. At the end of 2010, investors in these government bonds would have earned an average annual return of 5.4 percent. Over the same period, corporate bonds earned an average annual return of 5.9 percent. The standard deviations for these two series were less than half that of stocks. Thus, high‐quality bonds offer a stream of steady returns over long periods of time, with relatively small risk.