Stock Investing Strategies

Stock investments

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Investing Money into Stocks and Bonds

Stocks and bonds can definately be a great tool to help you grow your money. They are something that can help everyone reach their finacial goals.

So, what are stocks and bonds? These are two different kinds of securities that allow you to get a somewhat steady growth on your money.

Companies are split into shares called stocks. By buying a stock you buy a percentage of the company. Over time as the company grows so do it’s shares of stock also if the company has great dividend stocks you share in some of the profit that the company makes, this means passive income. The idea here is to buy strong stocks that are likely to go up and then hold onto them until hopefully sell the stock for more in the future.

Bonds work a little differently. investing into bonds is also called investing into debt. Basically when you get into a bond you are loaning money out to the individual company. In exchange for your contribution you recieve a nice cash flow of interest payments. Also when the bond matures the company will have to buy to back, hopefully it has increased so you could make money that way as well. The idea is to get into a bond, receive the interest payments and hopefully profit when the company buys the bond back.

So which one of these two strategies is better? If we look at Stocks or Bond you will find that they both have some positives and negatives associated with them.

The advantage of bonds is that they are considered safe. If the company owes you money they are required to pay you back. As long as the company still exist you will pretty much recieve interest payments. The bad part about this is that bonds typically have a pretty low yield. Safer investments tend to pay poorer returns.

Stocks on the other hand have the potential to give off much higher returns, but they are also considered riskier and more volatile then bonds.

Each is a little different and each individual investor can decide which one seems like a better investment for them or you can take the generally recommended approach and diversify your money across both assets.

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