Stocks and Bonds

They’re words you hear on all the different finance updates we get across our platform.

To some, their meaning is quite clear. To others, it’s not so straight forward.

For everyone, they’re what we use to maximise our investment portfolio.

The breakdown of shares

The stocks of a company are traded through the selling of shares.

When we hear the word ‘share’ in terms of finance, we don’t want to think of kindergarten manners. We see them as a way of generating wealth. We see them as a line on a graph that creeps higher and higher — ideally, anyway.

And technically, we’re not wrong. Share prices go up and down. ASX graphs show these fluctuating prices. People do generate wealth from them.

But those kindergarten kids might be on to something as well…

See, when we buy a company’s shares, we are in fact, buying part ownership of that company. So we’re sharing their success. We’re getting a slice of their pizza.

Unfortunately, we’re also sharing their failures. So if the pizza falls on the floor, we get nothing, even though we chipped in for it.

The trick is to invest in the companies that know how to hold a pizza box properly.

Bonds…stock bonds

To stay on this pizza metaphor, sometimes a company really wants to start catering, but they just don’t have the dough — pun completely intended.

In this case, they might issue a bond. This is a fixed income investment, where the investor lends money to an entity to borrow. An interest rate is agreed upon, as well as a time frame within which the loaned funds must be returned. This is called the maturity date — and it has nothing to do with puberty.

Investors can use bonds to construct a well-rounded, secure portfolio, provided they make the right calls.

And that’s where we come in…

Stay in the know

Here at Money Morning, our job is to make sure our readers are given the right information and the right advice for investing in stocks and bonds.

And we don’t stop there.

Our finance analysts will give you tips to navigate your way through everything from blue chips and small-caps, to dividends, tech stocks, mining shares and more.

With our advice and daily updates, you can grow your wisdom, your wealth and fine-tune your command of the stock market.

Check out our latest articles down below.

Nothing Surprises the Market

Nothing really ever surprises the market. This is why there is nothing more important than learning how to read a chart. And why you only ever trade with the trend. Because the chart is often pricing in conditions as best it can, weeks and months ahead.

Where Are Stocks Heading from Here?

What we might end up seeing is a level playing field for all. What I mean by that is costs for producing goods in Australia might be as low as they are in China. In such a world, where machines do the work, labour costs become redundant. And thus, producers in Australia can compete with those in China.

Election Upset to Drive Rally

Stocks that may come under selling pressure are gas stocks that may have benefited from an expansion of the Northern Gas pipeline as promised by Labor, and diagnostic imaging companies that ran hard ahead of the election on expectations of a Labor win.

Why I’m Long Thiel, Short Buffett

Everyone knows Warren Buffett likes to invest in monopolies. Companies with a ‘wide moat’ he euphemistically calls them. Which is just as well, as his favourite holding period is ‘forever’. You can’t have pesky things like competition getting in the way.

Aussie Tech Will Implode

Fund manager Ray David recently pointed out in a LinkedIn post that Aussie tech/software values are now trading at similar multiples to five of the richest Nasdaq stocks in 2000…

How to Up Your Income Flow

One way to generate an extra lot of income beyond dividends is to write (sell) call options. By writing a call option, you are agreeing to hand over these shares at the option’s strike price, if the buyer exercises the option.

Who Will be the Winners of the EV Industry?

Let’s take a quick trip to China. Where the cities are crowded, the air is average at best and there are EV start-ups everywhere. As of March this year, there were 486 EV manufacturers in China. And guess who have been the stars of China’s recent stock market listings?
Money Morning Australia