What Is the Difference Between Stocks & Bonds?

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Stocks are what people buy when they want to be part of the ownership group of a corporation, while bonds are money that is lent to a corporation or a government. Buy bonds to receive a fixed rate of interest with help from a personal asset manager in this free video on the bond market and money management.

Part of the Video Series: Bond Market
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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.


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