Many people complain that bonds are confusing, arcane and downright dowdy when compared with stocks. And to a certain extent, they are right: Stocks have historically outperformed bonds over the long term.

But when the stock market turns against you, bonds can be your best friends. Even a relatively small amount of bond exposure tends to soften the blow when the stock portion of a portfolio is in decline.

Once the stock market is in recovery, it can be tempting to forget the value of bond exposure. But wise investors will remember that it's best to be prepared for sudden changes.

If you are under age 40 and have decades to make up for short-term losses in the stock market as well as a steel gut you could avoid bonds and invest 100% in stocks and come out ahead. But anyone age 40 or older would be silly not to diversify with at least some exposure to bonds.

It's true that figuring out how a bond really works is only slightly less confounding than learning quantum physics. But this section will help by giving you the basic background you'll need to invest in the fixed-income market wisely. It will also prepare you for our Strategic Investing section, which can help you formulate a bond strategy that makes sense for you.