What's the difference between fixed income and equities?

With fixed income, the return is agreed upfront: you know what you'll receive if you hold to maturity. With equities, the return depends on the asset's performance, with no promise at all: it can be spectacular, mediocre, or negative. The first sells certainty; the second, potential.

Can fixed income cause losses?

Yes, in three ways: the issuer defaults (credit risk), you sell before maturity with rates working against you (market risk), or inflation outpaces your rate and you lose purchasing power even though you collect every promised peso. “Fixed” describes the promise, not the absence of risk.

What exactly are CETES?

Treasury Certificates: short-term debt from the Mexican government (28, 91, 182, or 364 days). They're bought at a discount and pay their full value at maturity. They're the “risk-free rate” benchmark in pesos and the simplest entry point into fixed income in Mexico.

Is fixed income or crypto the better choice?

It's a trick question, because they serve different purposes. Fixed income stabilizes and pays predictably; crypto assets offer growth potential with high volatility. A coherent portfolio can hold both, in proportions dictated by your risk profile and time horizon, not an imagined rivalry.

What happens if I need my money before maturity?

It depends on the instrument: some allow early sale at market price (you could gain or lose depending on how rates moved), others apply penalties, and others simply have no market to exit through. The preventive rule is to match the instrument's term to the actual date you'll need the money, and keep emergency liquidity out of these vehicles.

Fixed income: what it is and what risks it has

Fixed income covers investments where the return is agreed upon in advance: you lend money to an issuer (a government, a company) that commits to repaying it on a set date, with interest known from day one.

It’s the calm half of the investing world. You know how much you’re putting in, how much you’ll get back, and when. That predictability is the product. In exchange, you give up the upside of growth assets: fixed income protects and pays moderately; multiplying your money isn’t its job. In Mexico, the everyday example is CETES, the Mexican federal government’s short-term debt, available from 100 pesos.

How a fixed income instrument works

The basic mechanism has three numbers: amount, term, and rate. You buy an instrument at a certain price, the issuer uses your money for the agreed term, and at maturity it returns your principal plus interest. Some instruments pay periodic coupons along the way; others, like CETES, are bought at a discount and pay everything at the end (you buy for 97 what will be returned to you as 100).

The nuance that surprises beginners is that if you don’t wait until maturity, the price of your instrument floats. When market rates rise, older instruments (which pay the previous, lower rate) are worth less if you try to sell them early; when rates fall, they’re worth more. “Fixed” is the promise at maturity, not the price along the way.

The three risks of fixed income

Credit risk: the issuer doesn’t pay. Minimal in debt from stable governments in their own currency, real in fragile companies; that’s why riskier issuers pay higher rates: the rate is the price of fear. Rate risk: selling before maturity when rates have risen means selling at a loss. And the most underestimated one, inflation risk: a 10% rate with 8% inflation leaves a 2% real return; with 11% inflation, you’re losing purchasing power while “earning” interest. Fixed income can be a guaranteed loss in real terms, and no one notifies you.

CETES, in round numbers

You invest 10,000 pesos in one-year CETES at a 10% rate: at maturity you receive 11,000, with no surprises along the way. Scenario A: inflation for the year was 4.5%; your real gain is around 5.3%. Scenario B: inflation was 9%; your real gain was under 1%. The instrument kept its promise identically in both cases: the difference came from the context. The lesson is that in fixed income, the nominal rate is the headline and inflation is the fine print.

Fixed income and crypto, worlds that touch

They seem like opposites, and they’re crossing paths more and more. Tokenized government debt is one of the fastest-growing categories in blockchain: funds that bring US Treasury instruments onto networks, combining traditional yield with crypto operations. And yield-bearing stablecoins mimic the fixed income experience (predictable periodic payments) without being the same thing: there’s no equivalent protection framework or state guarantee, and the backing depends on the issuer. For investors, classic fixed income still plays a specific role in the portfolio: the anchor that doesn’t move when everything else shakes.

How to invest in fixed income in Mexico

The most commonly cited entry point is the government’s direct-sale CETES program, which lets you invest from 100 pesos with no intermediaries or fees, with configurable automatic reinvestment. Digital investment platforms and fintechs add access to longer-term instruments and corporate debt, with the convenience of an app. For crypto investors, the mental parallel is direct: fixed income is the “stable” module of the portfolio, the same role many give to yield-bearing stablecoins, with the difference that here the issuer is the state and the protection framework is the traditional one.

FAQ

Related terms

What is fixed income?

In one sentence