Stocks & Bonds: What Are They?

Do you want to invest in the stock market but you don’t understand all of it? I definitely understand how you feel. Understanding how to invest in the market can be difficult and very complexed. Let’s get started by understanding what stocks and bonds are.

A stock is a partial ownership of a particular business or corporation. Once you purchase a stock(s) with the company, you then become a shareholder of that corporation. You can buy a stock through a stock brokerage. There are two types of stocks you can purchase, common stock (speaks for itself) and preferred stocks (exclusive, similar to bonds).

A bond is an investment loaned to a company or government for a period of time- this can range from 3-15+ years. As the bond matures, you gain profit from the ending term. There are seven types of bonds that pertain to their own investment purpose: high-yield bonds, municipal bonds, GSE bonds, Treasury bonds, investment-grade bonds, foreign bonds, and mortgage-backed bonds. Bonds have not maintained their credibility within the past few years due to inflation and recent political events. However, it thoroughly depends on the individual investor to make his on her decisions for their portfolio diversity.

There are also other ways you can make orders in the stock market such as stop limits, futures, options, etc. Young or old, investing is a decision away and perfect time to get started is…now!


Author: Black Tea

C.Jackson, creative writing and investor at Black Tea. Building a brand and social network community with investors and entrepreneurs.

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