November 22, 2014 Admin | November 22, 2014 What is a stock? What is a bond? Why should you own both in no-load index mutual funds? Where?
4 thoughts on “November 22, 2014”
Stocks are, “shares of ownership in a publicly held company”, whereas bonds are, “loans investors make to a corporation/government” Financial Happiness by Finley. You should own both in no-load index mutual funds, because there are no commissions. You should own them @ Vanguard.
A stock is a share in a company, if you own a stock you are part owner of that company. The stock pays off depending on how well the company does. A bond is debt help by the company. A bond is like a loan that is payed off with interest over a set time. You want to own both at the lowest costs though no load index funds at Vanguard. You want to get the full return so its best to pay as little in costs to own them.
A stock is a share in a company while a bond is debt held by a company. You should own both because when one does bad the other usually does good. You should own them in a no load index because that is the cheapest way to own them.
Outstanding! Let’s review.
When you buy stocks (equity) you become an owner. When you buy bonds (fixed income) you become a lender. The owner is paid in earnings and dividends. The lender is paid in interest. You want to own both in no-load index mutual funds to broaden your risk all over the world as you own thousands of individual securities (stocks and bonds).
You can do this at Vanguard.com and your company retirement plan at work. Invest in your future NOW.