How do stocks and bonds differ?

Stocks are good for income while bonds are good for long-term growth.

Stocks may help you protect your money from inflation while bonds may be more susceptible to losing their value over time due to inflation.

Stocks are loans you give out to corporations and get paid back with interest; bonds are shares of a company that you own.

Stocks are low risk while bonds are high risk.

Question

22-02-2020
Business

contestada

How do stocks and bonds differ?

Stocks are good for income while bonds are good for long-term growth.

Stocks may help you protect your money from inflation while bonds may be more susceptible to losing their value over time due to inflation.

Stocks are loans you give out to corporations and get paid back with interest; bonds are shares of a company that you own.

Stocks are low risk while bonds are high risk.

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Answer:

The most suitable answer is Stocks may help you protect your money from inflation while bonds may be more susceptible to losing their value over time due to inflation.

Explanation:

Now remember, this is not "guaranteed" as stocks come with higher risks comparing to bonds, yet in US share market, stocks have performed well than the bonds overall. This is because stock prices fluctuate and if the company invested in is performing well, the share prices can sky rocket over a long period while in bonds you don't see this often as they are issued for a specific time and represents the debt capital.