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This video summarizes the risks and rewards of purchasing stocks and bonds, as well as investing your cash assets.

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7. Risks and Rewards of Buying Stocks Vs. Bonds

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7. Risks and Rewards of Buying Stocks Vs. Bonds

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This website provides the risks and rewards of investing in the stock market, or the bond market

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Stocks and bonds differ dramatically in their structures, payouts, returns and risks. In order to answer the question of the advantages and disadvantages of owning one over another, we need to go through a brief description of both stocks and bonds.

A bond is a form of debt with which you are the lender instead of the borrower. Bonds are contractual loans made between investors and institutions that, in return for financing, will pay a premium for borrowing, known as a coupon. Additionally, the bond's face value is returned to the investor at maturity. The guarantee of payback and all coupon payments relies solely on the ability of the borrower to generate enough cash flow to repay bondholders.

Stocks are a form of ownership; they represent participation in a company's growth. Generally, investors are given no promises about returns of the initial investment. In fact, the profitability of the investment depends almost entirely upon rising stock price, which, at the most fundamental level, relates directly to the performance and growth (increasing profits) of the company.

So this leads to the original question: which security is better? The answer is neither. Stocks and bonds both have their pros and cons depending on what you are looking for. For example, risk-averse investors looking for safety of capital and who prefer a known periodic payment structure (i.e. coupon payments) for a limited time frame would be better off investing in bonds. On the other hand, investors who are willing to take on greater risks than bondholders and who would prefer the benefit of having partial ownership in a company and the unlimited potential of a rising stock price would be better off investing in stocks.

However, the disadvantage of stocks versus bonds is that stocks are not guaranteed to return anything to the investor, while in principal, bonds offer fairly reliable returns through coupon payments. Thus, the possibility for high returns is greater with stocks, but so is the possibility of losing money.

For most investors, a combination of stocks and bonds is the best situation. By diversifying your investments and placing money into both stocks and bonds, you ensure some safety while leaving some opportunity for above- average returns in your stock investments.

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What are the advantages and disadvantages of buying stocks instead of bonds?

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Stocks and bonds differ dramatically in their structures, payouts, returns and risks. In order to answer the question of the advantages and disadvantages of owning one over another, we need to go through a brief description of both stocks and bonds. A bond is a form of debt with which you are the lender instead of the borrower.

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As you can see from these videos, there are different times that you can and should be investing. Some factors include how much money you can "play" with, how old you are, how much debt you have. etc. One investment may be right for one person, but it could be wrong for another.

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2. Bonds and Stocks: Defined and Differentiated

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2. Bonds and Stocks: Defined and Differentiated

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From this website provided, I hope that you will have a basic understanding of stocks and bonds.

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What are the differences between Bonds Vs Stocks and what really are they. The following article provides a simplified answer to these questions and more.
Bonds and Stocks defined:
Stocks: A stock is a type of security that represents ownership in a company. With stocks an investor is investing in a company.

Bonds: A bond is an investment that represents a debt by a company or government. With bonds an investor is loaning the entity money.

Differences between Bonds and Stocks:

The primary difference between stocks and bonds is the how an investor participates in funding the entity. With stocks an investor is taking ownership and therefore participating in the growth of the company, or its demise. With bonds an investor is lending the entity money at set rate of return and duration and does not participate in the growth of the entity, but does take precedent over stockholders if the entity fails in a bankruptcy preceding.

From a risk difference, bonds typically represent a less risky way to participate in the marketplace especially in a deflationary period, such as a recessionary period in the economy. In a highly inflationary period, such as an expansion in the economy, stocks typically provide the best way to keep pace with the growth.
Bonds Vs. Stocks
Today stocks are mainstream but not long ago bonds where the only place to be. Risk tolerance in the market determines whether stocks vs. bonds are in favor. When we look at any cycle in a market it is important to understand these cycles act much like price action, where even though a market is expanding or shrinking, it is never in a straight line. Markets breath, meaning that if they are expanding they take two steps forward and one step back. If a market is shrinking it takes two steps back and one step forward.

Stock and Bond cycles have breath, for example even if stock ownership was on the rise it would still cycle from stock ownership expansion to bond and back but stocks would outweigh bonds 2 to 1. The same could be said if bonds were expanding in ownership it would cycle from bonds to stocks and back again, but bonds would outweigh stocks 2 to 1.

Conclusion:

From all of the above, we should be able to see how the cycle between stocks and bonds is a good indication of what types of economic pressures exist on investors. A bond investor is looking for a fixed outcome where a stock investor is making a bet on the future or an assumption of an expanding economy.

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Bonds Vs Stocks - Defined and Differences

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What are the differences between Bonds Vs Stocks and what really are they. The following article provides a simplified answer to these questions and more. Bonds and Stocks defined: Stocks: A stock is a type of security that represents ownership in a company. With stocks an investor is investing in a company.

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6. Bonds and Stocks: How to Choose the Right Option

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6. Bonds and Stocks: How to Choose the Right Option

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This website will provide you with some very vital information in regards to investing in the stock market, or the bond market,

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Russell Investments United States | Multi-Asset Solutions

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At Russell Investments, we stand with you, whether you're an institutional investor, a financial advisor, or an individual guided by an advisor's advice.

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This video that you are about to watch should provide you with a further explanation of stocks and bonds, and how they impact both the company and the investors

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Finance & Capital Markets | Khan Academy

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| Finance & Capital Markets | Khan Academy

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Bonds vs. stocks | Stocks and bonds | Finance & Capital Markets | Khan Academy

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This video will outline what type of stocks you should be investing in, in your 20's.

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Must Watch Join Golden Penny Stock Millionaires

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All Marijuana Penny Stock Investors & Traders

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Millionaire Trader Tim Sykes Harvard University Speech

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Best to Invest in Penny Stocks in Your 20's

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Tim Sykes, a 25 year-old hedge fund manager, gives advice for young investors.

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8.   Risks and Rewards of Stocks and Bonds

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8.   Risks and Rewards of Stocks and Bonds

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When purchasing a stock, there is somewhat of an unlimited ability for growth of your investment. However, with bonds, the investor knows what to expect as far as value goes. Essentially, the potential of appreciation of a bond is nowhere near as high as it is for a stock.

Although stocks have the potential for great growth, they have the potential for great losses, whereas bonds are generally much sturdier investments as they don’t come with that risk of loss.

Inflation is another risk that must be accounted for, especially with bonds. With inflation comes higher prices, and the interest that you may accrue from the bond might not necessarily have the purchasing power that you bought it with.

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1.   Risks and Rewards of Investing in the Stock or Bond Market

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1.   Risks and Rewards of Investing in the Stock or Bond Market

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Choosing between investing in the stock market or the bond market can be quite a confusing notion for some people. I have created this Padlet to help clear up some of the issues regarding investing in a company’s stocks or bonds. In addition, I will go on to discuss the risks and the rewards.