Stocks and bonds are two different securities. Stocks are equity securities. This means that when you own stock, you own part of the company. Bonds are debt securities which means when you own bonds, the company is in debt to you and owes you money.
Generally, stocks will make you more money. With a well diversified portfolio in stocks that are stable, you can earn a nice return. With the same amount of risk, you probably couldn't do as well with bonds. You'd have to invest in junk bonds in order to make a lot of money.
There are more ways to earn from bonds than just getting an interest rate. With this taken into account, you could make a little more with them. You could trade them like stocks.
Honestly, I don't think bonds are worth it if you are a young investor. As you get close to retirement, you should concentrate more of your retirement funds on bonds over time. If you are still in your 20s and 30s and you don't plan on retiring until you are in your 60s, you might as well make as much money as you can with stocks now.
| | Posted by karyritt at 6:51 PM - | |
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