Bonds vs Stocks
Every person has to make some investment choices. In the investment arena, two frequently used terms are stocks and bonds. A lot of people invest their money through stocks and bonds. The whole point of investing your money with some company is to multiply it. But do you know how stocks and bonds function and how exactly you get profits? There are certain marked differences between the two. We'll enlighten you on these in this article.
You must have a picture of a loan. Bonds are very similar. Investing in bonds means that you are loaning your money to a company, organization, or government of your choice. You get a receipt for your loan from the concerned body, and you get the interest on your loan in the form of a bond.
A bonds value is directly determined on the value of its interest rate. This rate is determined from the economy and value of the open market. If a bonds interest rate goes up then the bond is worth more for face value. If the bond's interest rate goes down then bond is sold at a lower face value.
Most investors are used to a higher rate of interest than what the bond pays. The bond is sold at a low value to offset the gap. The OTC market is the best place for trading in bonds. You can buy corporate bonds from stockbrokers too.
When you buy a stock, you are buying part of the company itself. You become part owner of the company. Stocks come in small, large and mid caps.
Stock prices fluctuate because of many factors mainly based upon on well the company is doing. If the company is making money and doing well then a stock's value could increase. You can buy stocks on the internet or through a broker. One thing to note is that stocks are riskier than bonds. - 23217
You must have a picture of a loan. Bonds are very similar. Investing in bonds means that you are loaning your money to a company, organization, or government of your choice. You get a receipt for your loan from the concerned body, and you get the interest on your loan in the form of a bond.
A bonds value is directly determined on the value of its interest rate. This rate is determined from the economy and value of the open market. If a bonds interest rate goes up then the bond is worth more for face value. If the bond's interest rate goes down then bond is sold at a lower face value.
Most investors are used to a higher rate of interest than what the bond pays. The bond is sold at a low value to offset the gap. The OTC market is the best place for trading in bonds. You can buy corporate bonds from stockbrokers too.
When you buy a stock, you are buying part of the company itself. You become part owner of the company. Stocks come in small, large and mid caps.
Stock prices fluctuate because of many factors mainly based upon on well the company is doing. If the company is making money and doing well then a stock's value could increase. You can buy stocks on the internet or through a broker. One thing to note is that stocks are riskier than bonds. - 23217
posted by X - Men @ 4:20 AM
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