You will often hear lots of investors mentioning both shares and bonds in the same breath, but there are plenty of differences. These differences include:
Shares are permanent, or until the company is taken over or goes bust. Bonds usually have a fixed life, shown on the paperwork you get.
Shares pay dividends, which can vary. Bonds pay interest, which should be fixed.
Shares give holders a say in the company proportional to their holding. Bondholders, in most circumstances, have no ownership or annual meeting voting rights.
Share prices can be very volatile. Bond prices vary less from day to day.
Share prices depend on profits. Bondholders have to worry more about credit risk.
dummies
Source:http://www.dummies.com/how-to/content/knowing-your-bonds-from-your-shares.html
No comments:
Post a Comment