Both play important roles in a well-rounded investment plan.
Represent partial ownership in a company. When you invest in stocks, you’re buying a share of that company—and your return may come from price growth or dividends. Stocks can offer the potential for growth but may also come with more ups and downs over time.
Are a type of loan you give to a government or corporation. In return, you typically receive interest payments over time. Bonds are generally considered less volatile than stocks and can help provide potentially steady income or preserve capital.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk.
