Bonds and Equities

When it comes to investing, there are a variety of money opportunities out there. People tend to go to the two main investment channels are stocks and bonds. These potential investors should be aware that a solid portfolio will consist of both things, as each serves a different purpose.

When people invest in stocks, they put their financial future in the hands of the market. These markets can sometimes be horrible and unstable, so this makes a somewhat risky investment strategy. That's not all bad, however, because some stocks are fairly stable and can provide repeated growth. Likewise, there are a number of smaller stocks that have the ability to explode in value and bring huge returns to lucky investors. The advantage of investing in stocks is that investors are not locked out for a period of time, and they can sell shares when they feel the time is right.

Government bonds eliminate uncertainty, Because the government is very good at paying the bonds. Savvy investors know their money will be tied up for a few years, but they are investing money. This eliminates some of the risks and puts at least some of those people 's portfolios tied to one thing and will pay off. The downside is that they will not be able to get the money within a set number of years, and the return on these funds is a bit low. However, there is a bond somewhere, because it can balance the mix to some extent.