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weblog/2005/11/stocks_bonds.html

Both are securities.

When you buy a share of stock, you are actually taking ownership in the company in which you are investing.As a result, you’d share in both the profits and losses of the company throughout the years.

A bond does not represent ownership in a corporation. The difference is that the return you will earn on your money as a bondholder is generally a fixed percentage such as 5% or 7% annually. If the bond lasts for 10 years, you will get interest each year for the 10 years, and then your principal investment returned to you at expiration date.

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