Stocks vs Bonds difference and comparison for a beginner’s guidelines for who interested in stock and bond market.
A stock market also called equity market is associated with buyers and sellers stock.It is a place where investor go to trade equity shares issused by public limited company.
Bond market is also called debit or credit market.It is a place where investor to go trade in new debt securities called as primary market.Investor buy or sell debt securities called as secondary market.
In this article we will understand the stock and bond market differences.
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Stocks vs Bonds difference and comparison
Stock represent partial ownership in company.when you buy share in any stock then you become indirect owner of this company for your share percentage.
Bond is a like loan to you for company or government.Bonds are not giving you any ownership when you buying the bonds securities.
Stocks market is a most popular in investment and bonds repaid you with interest.
When you buy Individual stock then this stock give you partially ownership in this company but bonds not giving you any type of stake in company.
Bonds and Stocks grow your money in various ways.
Stocks this way is a most popular in investors.make money from stock market you need to buy with low price and sell higher price.
make money from bonds through regular interest payment.bonds investing money in various method like a treasury bonds, corporate and municipal bonds.
- Treasury Bonds : This is a safe way to grow your money.treasury bonds pay rate of interest every six month.this type bond issued for a durations 20 to 30 years.
- Corporate Bonds : When any public limited company decide a grow their capital then he issued the corporate bonds.corporate bonds give you highers return.
- Municipal Bonds : This Bond’s issued by the country, state or any city to building school, highway or any project like metro station.
Pros and cons of Buying Bonds
|Bonds are relatively safe.you have a majority invested in stocks then bonds can diversify your assets portfolio and make low risk.bonds are generally safe than stocks.||Low interest rate means bonds give you low interest rate than any bank or mutual funds..|
|Bonds giving you fixed income means giving you interest at regular interest, predictable rates and intervals.||Some Risk.|
sometimes you not choose a right bond then you lose your invested money in bonds.best and default risk in bonds.
Investor always like to invest in bonds and other financial assets.
No one give you guaranteed equity bonds to grow up your cash because it’s fully depend upon a investor.sometimes equity is safe than bonds.bonds give you fixed income vs equity doesn’t give fixed income.
Investment growth bond duration minimum 6 month generally but you can bond sale best and less mature.
Stock market investor called shareholder and bond investor called ledger.
Bond give you return principal with interest in 6 month term as compared to stock market does not give any fix income.
Stock market control by stock exchange and bond issued by government institutions, corporate institution, private and public institutions for their need.
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