Most Americans probably have a rudimentary understanding of stock certificates. And millions participate in the stock market through mutual funds.

By comparison, relatively few people understand bonds. Certainly the concept of higher prices representing lower yields is confusing to grasp. In truth, the differences between the two are simple:

	Stocks represent ownership of companies.
	Bonds represent loans made to companies.

Financial terminology is rich in jargon. So I have added a glossary of stock and bond terms. I also heartily recommend this book, Understanding Wall Street, by Jeffrey Little and Lucien Rhodes. See your local bookstore or Amazon.com.