Tag: Investments

Stocks vs. Bonds: The Pros And Cons Of Each Investment

You don’t need to be a finance professional to know that there are many ways to invest your money. But, if you’re like most people, you probably have no idea what those investment options are or which ones are right for you. This article will discuss the pros and cons of some common investments so that you can make an informed decision regarding stocks vs. bonds about what’s best for your financial situation.

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Stocks are a common way to invest in companies and can be pretty volatile and risky, but they can also reward you with long-term growth. One big pro here is that the money you earn from stocks is yours to keep–you don’t have to pay taxes on it until you sell the stock or cash out your investments. If you hold onto your shares of stock for several years, there’s no limit on how much profit they can generate over time as long as the company keeps growing and increasing its profits (and thus its value).

On the other hand, one disadvantage is that investing in stocks requires more risk than investing in other types of assets like bonds or real estate because there’s always a chance that things could go wrong with any given company; if that happens, all your money could disappear very quickly if you don’t sell before then.

Additionally, since each rather than an entire business, there may be times when certain shareholders receive dividends while others do not. This depends entirely upon their respective holdings within the said corporation. So if someone owns more shares than another person does, then their stake will yield greater rewards overall even though both parties would technically qualify under “ownership” status.


Bonds are essentially debt instruments that allow you to invest in the companies, governments, and other entities that issue them. This investment type can be used by investors primarily to make a profit on their money while also providing some stability in their portfolio.

Bonds are typically issued at face value (called par), which means that if you buy a bond for $1 million and it has 10 years left on its term before maturity, then when you sell it back after those ten years have passed, your $1 million investment would turn into $10 million. The amount of interest varies depending on what kind of bond you buy.

Different Investments Are Right For Different People

Stocks are riskier than bonds, but they also have the potential for higher returns. Bonds are safer than stocks, but they don’t offer much opportunity for growth or profit. So as for stocks vs. bonds, you should think about your risk appetite when deciding what kind of investment you want to make.

If You Hate Volatile Investments, Stay Away From Bitcoin

If you’re reading this, you probably have some understanding of what volatility means. But that doesn’t mean everyone does. A recent study found many investors misunderstand volatility and how it affects their portfolios.

Volatility Is A Measure Of Risk

Volatility is a measure of risk. It is the standard deviation of a return, which means it measures how far a series of returns deviates from its mean.

A high-volatility stock will have more ups and downs than one with low volatility, but each move will not be as extreme as it would be for the other investment (i.e., if you invested $100 in both stocks and they both returned 10%, then the high-volatility stock would have had bigger gains than losses).

It Isn’t Constant; It Fluctuates Over Time

The first thing to understand about volatility is that it’s not constant. It changes over time, and it can be high or low depending on the market.

High volatility means that your investments are subject to big swings in value–up or down–which means you need to be prepared for those changes and be able to withstand them as an investor.

See It As The Standard Deviation Of A Return

The standard deviation of any investment is a measure of its risk. It tells you how much an investment’s returns vary, on average, from their long-term trend or mean. The higher the standard deviation, the more volatile an asset’s price movements are likely to be; this means that there is more uncertainty about how much money you will make from your investment in any given period (and also more opportunity for large profits).

It Measures Risk And Its Level Will Change Over Time

All investors need to know about volatility is that it measures risk and that its level will change over time.
Volatility measures how much the returns of an investment vary from day-to-day, month-to-month, and year-to-year.

It’s also called standard deviation because it tells us what percentage of our portfolio could be lost during any given period if we invested all our money at once in one stock and held on without rebalancing or adding new funds (more on this later).


What does this all mean? Well, the first thing to remember is that volatility is a measure of risk. It’s not something you should worry about on its own, but rather as part of a larger portfolio.

If you’re not comfortable with volatility in your investments, then you should consider lowering your exposure by purchasing less stock or selling some out-of-the-money puts on ETFs such as SPY (SPDR S&P 500 ETF), which tracks the S&P 500 Index; IWM (iShares Russell 2000 Index Fund), which tracks small cap stocks; and XLF (Financial Select Sector SPDR Fund), which represents banks and insurance companies among others.