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Financial differences between stocks and bonds
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:
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Stocks represent
ownership of companies. |
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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.
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