Which Is Better: Stocks Or Bonds?

Securities investment falls under the broader umbrella of bond and stock market investing. Apportionment of investments depends on the level of risk you are comfortable with. Investment in bonds has less risk of loss than stocks, but also less potential for gain, particularly during periods of inflation. On the flip side of the coin, stock market investing has more potential for high yields, but with no guarantee against loss, since stock prices are more volatile.

You should invest partly in bonds and the balance in stocks. If you are older, invest less amount of money in stocks and more in bonds. However,if you are young,you should invest more in shares of companies. Choose those companies for stock market investing that have growth potential and proven track potential.

Shares come in different sizes and categories. There are large, mid and small caps and there are penny stocks. As a beginner, you can invest in large and mid cap companies and only after you gain experience, you can consider investing a small portion in small caps and hot penny stocks. These are the riskiest but if handled adroitly, give the largest returns. However, it needs expertise and nerves of steel.

Jumping right in stock market investing is not something one should do. On should start spending some time to learn the basics of stock market investing along with its various aspects. As you start gaining knowledge, then you should start investing small amounts of money over a period of time rather than investing all the money at once.

Bond investing is quite easy as compared to stocks. You can get a list of high rated companies and government bonds from your banker or broker easily. Bonds will give you a good return only if you hold them for a long time period. On the other side people wanting returns in short period can look for investing in stocks and at the same time stocks can be held for long time too.

Ignore tips from others on which share to buy. This applies especially to hot penny stocks as these are considered the riskiest investments. They are to be considered only after you do thorough research on the company concerned and all other related factors. Happy investing!

Written By: Randy Martin

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