The Difference Between Stocks and Bonds

Sometimes it’s very hard for a newcomer to the world of finance to understand the difference between the two. The first thing that comes to mind is “stocks are riskier than bonds”. Basically it’s true. Potential stock profitability is higher. So as risk.
Stock means “ownership” of the company. The price of the stock will depend on actual performance of the company and may fluctuate.
Bond means “credit” given to the company. The percentage the investor gets is fixed.
If we think of an ideal portfolio for the investor, it should, probably, consist of the two.

Related posts:

  1. beginning
  2. priority
  3. still choosing…
  4. let’s say…financial security

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One Response to The Difference Between Stocks and Bonds

  1. Very well written story. It will be helpful to anybody who usess it, as well as myself. Keep doing what you are doing – i will definitely read more posts.

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