What Is the Difference Between Stocks & Bonds?

Video Transcript

"Hello. I'm Roger Groh with Groh Asset Management. Welcome to today's edition of What's the Difference Between Stocks and Bonds? Well, if you want to be part of the ownership group of a corporation, you would buy stock in that company. You can then participate in all of the growth that they have, whether it's increases in unit sales or net income, dividends, whatever it might be. On the other hand, if you just want to lend money to a company and receive a fixed rate of interest, or a variable rate of interest, depending upon how the instrument is written, for the money that you've lent to them, then you would do that through a bond. So, if you buy a bond, that means that you've lent money to a corporation or to a government. If you buy stock, that means you actually bought into the ownership group of that company, and you own part of the business. I'm Roger Groh, and that's a little bit about the difference between stocks and bonds."