How Stocks and Bonds Differ

Description

This video by TV360 offers you expert advice on the difference between stocks and bonds.

Transcript
How Stocks and Bonds Differ Phillipe: My name’s Philip. I live in Houston, Texas. I just recently started looking into trading stock. What is the difference between stocks and bonds? Sam Stovall: Philip, stock ownership is a slice of the overall company. You buy it because you like what the company makes. You like the prospects for that company in terms of new product development, in terms of earnings, increases and as a result in terms of share price appreciation. Also on a periodic basis, the company will pay you something called a dividend. Bonds however are IOU’s that are issued by companies that are issued by states or municipalities as well as the overall government. What you do is you buy a bond for a particular price, let’s say a thousand dollars. You will then get a stream of income known as the yield. And then at the end of a time period, you get back your initial investment. The difference between stocks and bonds is the volatility or in the sense the swings of prices overtime, but also the overall return. The higher the volatility, the greater the return potential. And stocks since World War II had doubled that bonds in terms of long term capital gains.
Related Articles

How Stocks and Bonds Differ

The Differences Between Stocks and Bonds

The most obvious difference between stocks and bonds are that - stocks enable the investor to own a part of the company, while the bonds are nothing but loans that the investors provide to the company...

Stock Funds - Higher Risk Than Bond Funds

One bit of conventional investing wisdom is that stock mutual funds have much more risk than bond funds. In this article we take a look at how stocks and bonds will have differing risks. We will also look at how much we should invest in stock funds vs bond funds....

How To Invest In Bonds

E*Trade claims finding and buying stocks is so easy, it can be done by a baby, so you already know how to do it, correct? While stock brokers over the previous 10 years online have tried to make investing in stocks as easy as child\'s play, unfortunately, investing in bonds has been slower to evolve. On many broker sites online, bond platforms are not even in existence. Therefore, the world of investing in individual bonds remains murky....

Bonds Compared with Stocks

It is perfectly clear that bonds are less risky than stocks when both classes of securities are issued by the same corporation. Since bondholders have a prior claim to the earnings and assets of the corporation, the rates of return on bonds are less variable and more confidently predicted than rates of return on the common stock. This fact is so obvious that it has not been studied and does not require study....

Bond Bubble?

Gold-observer.com provides continuing valuable insights into why Gold and precious metals are extremely solid and reliable investment options now and for coming years. Rates will certainly rise in the future, and those who invest now will see their assets grow to satisfactory levels. Please visit our site for the premier comprehensive analysis in the business today....

High Income Bonds and Bond Funds

High income bonds and bond funds are paying 10% when other bonds are at 5% or 6%, and bank CDs are paying 2% and less. If you want higher income, consider high yield bond funds, but first "buyer beware". These investments are called "junk bonds" for a reason....

Family Bonding

Family bonding or just plain family fun. I have many rather vivid memories of all the places my family would go when school was out and we kids were raring to go for the summer....

Tips on Buying Bonds

Companies are able to raise money in the market in one of two ways, issue stock or issue the debt instrument also known as a bond. Stock transfers some ownership of the company to stockholders, while bonds don't give any ownership to the buyer; the company seeks and will pay the buyer when it matures with interest....

Stock Investing Vs Bond Investing

When it comes to investing money most folks know that stock investing can be tricky business, although they don't really understand it. Few know anything about bond investing, period. Here we shed some light on these two major investment options, and compare and contrast....