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Your Questions About Bonds Vs Stocks




Linda asks…




Mutual Funds vs. Stocks/Bonds?
What is the difference between mutual funds and stocks?

What is the difference between mutual funds and bonds?




Steve Winston answers:

A mutual fund is a "basket" of individual securities. It could be a stock fund or a bond fund, or a
fund that has both stocks and bonds in it. It's usually professionally managed by a fund
manager or team. It allows you to diversify with smaller amounts of money.

Disclaimer. The information in this response is for general purposes only, and shall not be
construed as specific tax, legal, or investment advice for any individual. The questioner is urged
to contact their own professional advisers before implementing any tax or investment strategy




                                                                                              1/9
William asks…




compare issuance of preferred stocks and bonds?
I have to compare and contrast the advantages and disadvantages of issuing preferred stock vs
bonds. I have struggled with this class and can't seem to find anything that breaks it down into
plain english. Any help would be much appreciated. I currently have an A and want to keep it.




Steve Winston answers:

Preferred Stocks are shares of ownership of the company.
Bonds are I.O.U.'s.




James asks…




                                                                                          2/9
stocks vs. bonds??
what's the difference between stocks and bonds.....




Steve Winston answers:

Stocks:

In simple terms, when you buy a stock, you buy ownership in the company. As such, you are
entitled to a share of the company's profits, which are paid to the shareholders through
dividends.

The price for company's stock is determined on the open market based on the overall market's
view of the company. If the company is viewed positively, more investors will want to own it so
increasing demand will move the stock's price higher. If the company is viewed negatively,
demand for the stock will be lower and the cost of the stock will fall.

Bonds:

When you buy a company's bond, you are loaning the company money for a specified period of
time at a specified interest rate. As such, you are not an owner, you are a creditor, and you are
entitled only to the interest you have been promised.

Assuming the company is able to meet its obligations, you will typically receive interest
payments either annually or semiannually, and you will receive the return of your investment
amount upon maturity. However, there is a market to buy and sell bonds prior to maturity. The
price paid for the bond on the bond market has little to do with the market's overall view of the
company: it is based only on the interest rate, the time until maturity, and the perceived
likelihood that the company will be able to pay the remaining interest and return the investment
amount upon maturity.




                                                                                            3/9
Risks:

Obviously, the price of stocks can fluctuate significantly based on a wide variety of factors, and
there is always a possibility of an investor losing some or all of the money invested.

For bonds, there is relatively little risk if the bond is held until maturity. In that case, the only risk
to the bond holder is that the company may not be able to repay the investment amount.
HOWEVER, inflation and interest rate changes can dramatically increase or reduce the value of
the bond on the bond market.




Laura asks…




Stocks vs. Bonds?
What’s the difference? What’s better to invest in? What affordable stocks are doing well and
will do well in the long run? What do you recommend?




Steve Winston answers:




                                                                                                    4/9
This question is too broad to give specific meaningful answers. Choose a mutual fund that
allocates your money across the whole spectrum (often called an allocation or blend fund) just
for starters and in the meantime start reading the newspaper "Investor's Business Daily" and
browse the website below and start finding the answers to your questions. You don't have to
understand everything just keep at it and go where you are interested and soon you will be a
whiz.

P.S. Professionals "in the industry" make their money by charging you fees! If they know so
much, why do they have to go to work in the morning, why don't they just invest wisely!




Carol asks…




What are the pro's and con's of Real Estate investments vs
Stock's?
On a cash basis. Real estate could take any form (residential, commercial, vacation,
apartments, reits, developments, etc). Stocks could be (individual, index). Maybe even vs
Bonds of all types.
Or private businesses, they could be original or even franchised. Maybe both Real estate
franchise ie Marriot.




                                                                                            5/9
Steve Winston answers:

Real estate is less liquid and transaction costs are more.
Stocks are are more volatile and risky.
Real estate usually does well in times of high inflation. Stocks generally dont.




Jenny asks…




I want to start investing on stocks or bonds. which is the best?
I am 23 yrs old and i want to start investing some of my money. i do not know anything about
the NASDAQ or ameritrade or any other place where ppl buy and sell stocks or bonds. i want
to start investing but i have no clue where to start or what website is best for me to beggin
trading on. i dont have a lot of money to invest but id rather put it to good use vs me jus wasting
it. any info would be appreciated thankx




                                                                                             6/9
Steve Winston answers:

I would said it is depend on your goal, risk taking, and knowledge. If you want a better return, I
would said stock is a better option. However, if you are lack of experience and knowledge. I
would recommend you to take a study and invest in mutual fund.




Helen asks…




Real estate vs stocks?
I inherited a sum of money in stocks and bonds. I currently have a mortgage of $75,000 on my
house. I am looking at the possibility of turning in my stocks and purchasing a 10 acre plot of
land (Full cash amount) and building a small house on the property, then renting out my current
house for enough to cover the taxes and mortgage on the current house.

Eventually the 10 acres of prime real estate will have a couple of smaller houses for rentals.
these small rentals will be built without mortgaging any of the land.

I just don't want to sell the original house in case I need it for a mortgage or to eventually sell,
as well as having the extra income from it once the mortgage is paid off.

Is this a sound investment plan?




                                                                                                7/9
Steve Winston answers:

Going to college is an excellent investment. Owning your own home and paying a mortgage
offers great tax advantages and is an excellent investment. Fully funding a Roth IRA with
mutual funds and stocks offers great tax advantages and is an excellent investment.

Once you have all of these in place (including the home mortgage), then take a look at the
money you have left, and make decisions about what to do with it.

Anything you do should have potential for immediate gains . . . Buying land and holding for
10-years is a real crap shoot. You have to maintain it, holds liability insurance, and pay taxes on
it. With a mutual fund or stock investment you can easily determine its value and have no
maintenance costs.




Michael asks…




Stocks vs. pereptuity bond?
What's the difference?




                                                                                             8/9
Steve Winston answers:

                                   1. Never herd av "pereptuity bond", maby it is "preferred stok" wich is not stok (sept legally).
                                   2. Bonds normally hav a end date, wen the "issuer" bi it bak.
                                   Preferred stok is like a bond, but no end date.




                                   Powered by Yahoo! Answers


                                   Read More… http://buystocksmakemoney.com/your-questions-about-bonds-vs-stocks-2/




                                                                                                                                 9/9
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Your Questions About Bonds Vs Stocks

  • 1. Your Questions About Bonds Vs Stocks Linda asks… Mutual Funds vs. Stocks/Bonds? What is the difference between mutual funds and stocks? What is the difference between mutual funds and bonds? Steve Winston answers: A mutual fund is a "basket" of individual securities. It could be a stock fund or a bond fund, or a fund that has both stocks and bonds in it. It's usually professionally managed by a fund manager or team. It allows you to diversify with smaller amounts of money. Disclaimer. The information in this response is for general purposes only, and shall not be construed as specific tax, legal, or investment advice for any individual. The questioner is urged to contact their own professional advisers before implementing any tax or investment strategy 1/9
  • 2. William asks… compare issuance of preferred stocks and bonds? I have to compare and contrast the advantages and disadvantages of issuing preferred stock vs bonds. I have struggled with this class and can't seem to find anything that breaks it down into plain english. Any help would be much appreciated. I currently have an A and want to keep it. Steve Winston answers: Preferred Stocks are shares of ownership of the company. Bonds are I.O.U.'s. James asks… 2/9
  • 3. stocks vs. bonds?? what's the difference between stocks and bonds..... Steve Winston answers: Stocks: In simple terms, when you buy a stock, you buy ownership in the company. As such, you are entitled to a share of the company's profits, which are paid to the shareholders through dividends. The price for company's stock is determined on the open market based on the overall market's view of the company. If the company is viewed positively, more investors will want to own it so increasing demand will move the stock's price higher. If the company is viewed negatively, demand for the stock will be lower and the cost of the stock will fall. Bonds: When you buy a company's bond, you are loaning the company money for a specified period of time at a specified interest rate. As such, you are not an owner, you are a creditor, and you are entitled only to the interest you have been promised. Assuming the company is able to meet its obligations, you will typically receive interest payments either annually or semiannually, and you will receive the return of your investment amount upon maturity. However, there is a market to buy and sell bonds prior to maturity. The price paid for the bond on the bond market has little to do with the market's overall view of the company: it is based only on the interest rate, the time until maturity, and the perceived likelihood that the company will be able to pay the remaining interest and return the investment amount upon maturity. 3/9
  • 4. Risks: Obviously, the price of stocks can fluctuate significantly based on a wide variety of factors, and there is always a possibility of an investor losing some or all of the money invested. For bonds, there is relatively little risk if the bond is held until maturity. In that case, the only risk to the bond holder is that the company may not be able to repay the investment amount. HOWEVER, inflation and interest rate changes can dramatically increase or reduce the value of the bond on the bond market. Laura asks… Stocks vs. Bonds? What’s the difference? What’s better to invest in? What affordable stocks are doing well and will do well in the long run? What do you recommend? Steve Winston answers: 4/9
  • 5. This question is too broad to give specific meaningful answers. Choose a mutual fund that allocates your money across the whole spectrum (often called an allocation or blend fund) just for starters and in the meantime start reading the newspaper "Investor's Business Daily" and browse the website below and start finding the answers to your questions. You don't have to understand everything just keep at it and go where you are interested and soon you will be a whiz. P.S. Professionals "in the industry" make their money by charging you fees! If they know so much, why do they have to go to work in the morning, why don't they just invest wisely! Carol asks… What are the pro's and con's of Real Estate investments vs Stock's? On a cash basis. Real estate could take any form (residential, commercial, vacation, apartments, reits, developments, etc). Stocks could be (individual, index). Maybe even vs Bonds of all types. Or private businesses, they could be original or even franchised. Maybe both Real estate franchise ie Marriot. 5/9
  • 6. Steve Winston answers: Real estate is less liquid and transaction costs are more. Stocks are are more volatile and risky. Real estate usually does well in times of high inflation. Stocks generally dont. Jenny asks… I want to start investing on stocks or bonds. which is the best? I am 23 yrs old and i want to start investing some of my money. i do not know anything about the NASDAQ or ameritrade or any other place where ppl buy and sell stocks or bonds. i want to start investing but i have no clue where to start or what website is best for me to beggin trading on. i dont have a lot of money to invest but id rather put it to good use vs me jus wasting it. any info would be appreciated thankx 6/9
  • 7. Steve Winston answers: I would said it is depend on your goal, risk taking, and knowledge. If you want a better return, I would said stock is a better option. However, if you are lack of experience and knowledge. I would recommend you to take a study and invest in mutual fund. Helen asks… Real estate vs stocks? I inherited a sum of money in stocks and bonds. I currently have a mortgage of $75,000 on my house. I am looking at the possibility of turning in my stocks and purchasing a 10 acre plot of land (Full cash amount) and building a small house on the property, then renting out my current house for enough to cover the taxes and mortgage on the current house. Eventually the 10 acres of prime real estate will have a couple of smaller houses for rentals. these small rentals will be built without mortgaging any of the land. I just don't want to sell the original house in case I need it for a mortgage or to eventually sell, as well as having the extra income from it once the mortgage is paid off. Is this a sound investment plan? 7/9
  • 8. Steve Winston answers: Going to college is an excellent investment. Owning your own home and paying a mortgage offers great tax advantages and is an excellent investment. Fully funding a Roth IRA with mutual funds and stocks offers great tax advantages and is an excellent investment. Once you have all of these in place (including the home mortgage), then take a look at the money you have left, and make decisions about what to do with it. Anything you do should have potential for immediate gains . . . Buying land and holding for 10-years is a real crap shoot. You have to maintain it, holds liability insurance, and pay taxes on it. With a mutual fund or stock investment you can easily determine its value and have no maintenance costs. Michael asks… Stocks vs. pereptuity bond? What's the difference? 8/9
  • 9. Steve Winston answers: 1. Never herd av "pereptuity bond", maby it is "preferred stok" wich is not stok (sept legally). 2. Bonds normally hav a end date, wen the "issuer" bi it bak. Preferred stok is like a bond, but no end date. Powered by Yahoo! Answers Read More… http://buystocksmakemoney.com/your-questions-about-bonds-vs-stocks-2/ 9/9 Powered by TCPDF (www.tcpdf.org)