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.

Most Traders Won’t Think to Look Here…

Now, scroll your eyes down the list. Only four stocks are from the ASX 200. This is the subindex many fund managers focus on. And if you prefer big caps, only one ASX 50 stock makes the list. Here’s a summary of the data.

S&P 500 Approaching Major Resistance

Even if the S&P 500 is going to head higher (The most important resistance level is above 2800), we should see some volatility along the way which can give traders ample opportunity to enter trades that can become free carried fairly quickly.

The Best Advice for A Trader Starting Out

Starting out is a unique time — and it doesn’t matter how old you are. You can start something new at any age. I’ve done this many times. Two words describe my emotions at the start of a new venture: enthusiastic uncertainty.

Why the Future of Netflix Looks as Grim as Japan’s

The streaming business could become extremely competitive. Netflix and others are benefiting while the industry continues to grow. But what happens when that industry matures? What happened when the world is saturated with on-demand video streaming?
Money Morning Australia