Putting the pieces together
A chart that explains the differences between bonds, mutual funds, and stocks.
Features: | Features: | Bonds: | Bonds: | Funds: | Funds: | Stocks: | Stocks: |
|---|---|---|---|---|---|---|---|
Features: | What | Bonds: | Loans to companies or government entities | Funds: | Pooled investments that can hold a variety of securities | Stocks: | Ownership slices of companies |
Features: | Risk level | Bonds: | Generally lower | Funds: | Depends on the risk level of the underlying securities | Stocks: | Generally higher |
Features: | Do investors receive income? | Bonds: | Yes, from coupon payments | Funds: | Only if underlying securities pay income | Stocks: | Only from stocks that pay dividends |
Features: | Easy to trade? | Bonds: | Can be difficult to sell | Funds: | Trade at least once a day | Stocks: | Trade throughout the day |
Features: | Major types | Bonds: |
| Funds: |
| Stocks: |
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