Question

Write a brief but persuasive argument of purchasing stock over bonds. (No more than one page). Identify the various types of stock and bonds in your argument.

Answer 1

Stocks And Bond :

Stocks are the ownership stakes and Bonds are debts.

Stocks and bonds represents two different ways for an entity to raise money to fund and expand their operations.

Stocks are simply the shares of the individual company other hand when an entity issue the bond it is issuing  debt with agreement to pay interest to use of the money.

The most important benefit investing in stocks over bonds is that history shows stocks tend to earn more than bonds especially long term stocks like IPO.

Investing in stocks gets high risk but will get high return while investing in bond is low risk will get low return as compare to stocks.

In Stocks a claim to companies assets and earning that often gives investor voting rights and pays dividends.

While investing in bonds is the debt that is made with an investor for cash in exchange of payouts of interest.

Stocks typically traded through central exchange (NYSE) while bond typically traded over the counter(OTC).

Investing money in long term stocks rather than short term investments provides tax advantages also.