answersLogoWhite

0

Why buys bonds and not stocks?

User Avatar

Anonymous

8y ago
Updated: 11/18/2021

Bonds and stocks serve different purposes to the investor, and ideally you should buy both.

Advantage of investment-grade bonds: the issuer is committed to paying you a stated amount of money on a stated date. The disadvantage is your return is limited to the agreed-on amount.

Advantage of stocks: potentially unlimited return on your investment. The disadvantage is there are no guaranteed returns with stocks; you could potentially lose everything you invested in them.

Speculative-grade bonds, or "junk bonds," have a risk/reward system more like stocks than investment-grade bonds.

User Avatar

Jadon Zulauf

Lvl 10
3y ago

What else can I help you with?