Stocks vs Bonds: Top 5 Differences & Investing Tips

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Differentiating between the stock market and bond market can help investors appropriately allocate their funds. Explore the differences and how to invest.

Differentiating between the stock market and bond market can help investors appropriately allocate their funds based on their goals and risk tolerance. After all, a diversified portfolio is generally recommended by market professionals under the same logic of not ‘putting all of your eggs into one basket.

Simply understanding what stocks and bonds are is not enough to make sound investment decisions. Being familiar with the risks involved with both financial instruments can help investors align their financial goals with the applicable instrument. Below is a tabulated summary of the associated risks with stocks and bonds:

Brokerage and trading fees need to be researched before making any investment in stocks or bonds. This part of the investment process is often overlooked. Be sure locate a reputable broker with transparent fees.

 

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