Last year, one of my clients asked me this question. He was well-educated, but had simply never had an occasion to learn how investments work. It struck me at that moment that if he didn’t know, then plenty of other people probably don’t, so I decided to prepare a short introduction to the topic.
Simple questions don’t always have simple answers, and a complete answer to this question would not be simple. But here is a simple description of the basic difference between stocks and bonds:
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If you own a stock, you are one of the owners of the business