Stocks vs Bonds

I love that my readers are thinking about investments!! I hope we all bread win one day and investments will certainly help. The big question is should you invest in stocks or bonds or what? I thought it would be a good idea to write a quick article explaining what both stocks and bonds actually are to help us make the right investment choices for our own personal goals.

In short, they are two different ways for a company to raise money.

Stock

A stock is simply a share of an individual company. You can think of it as an ownership percentage. For example, if a company has 100 total shares and you buy 10 of them then you would be a 10% owner (my boyfriend tells me this is a gross exaggeration). Stocks are often referred to as ownership. So in my overly simplistic example… *rolling my eyes*… if the stock moves from $5 to $10 then I would have made $5 per share. Since I own 10 shares my investment would have grown $50. Sometimes stocks pay dividends also.