What is the difference between shares and bonds?

Stock and shares or bonds?

• i wanted to buy and sell stock and shares, but im now looking into bonds as another possinbility. but what exactly is the difference between selling either one of them?is buying and selling bonds the same process as dealing with stock and shares?

• Answer:

  bond = fixed interest payment and they pay you back your principal towards the end of the bond's term. if the company goes bankrupt, you get paid before shareholders. bonds are relatively safe compared to shares so they lower interest rates and they rarely issue them. Government bonds are the safest, but if you invest in government bonds, it would only mean you keep your money's value and mean very little else. this would be great if inflation was a huge problem shares on the other hand is riskier but you get more dividend if the company pays and you get more capital gain, if the company does well. The drop side is that there is more volatility and higher sensitivity i.e. a small rumour can lead to massive price changes and you get a lot more ups and downs which makes you a bit nervous at times. overall, a successful cash cow would be somewhat similar to that of a bond - expensive and pays relatively little. hence the saying it takes money to make money (which isn't true). the other advantage you get with shares over bonds is that you get a vote with shares and with bonds you just get paid. in terms of relevance, I would say this advantage would apply very little to you. If you want something safe, go with bonds but you learn absolutely nothing and there is little to gain but they can be expensive. If you go with shares, you earn money if the company does well but it often means you have to keep your eye on the ball. Hope this helps