What is the difference between a stock and a bond?

What is the difference between a stock and a bond Introduction: The Foundations of Investing Hello, and welcome to our comprehensive guide on stocks and bonds. Before we dive into the differences, let's establish a solid foundation. Investing is the art of allocating resources, usually money, with the expectation of generating future benefits. It's a way to grow wealth, achieve financial goals, and even support businesses. However, the investment landscape is diverse, offering various options. Two of the most prominent ones are stocks and bonds. Section 1: Stocks - The Essence of Ownership When you buy a stock, you're essentially purchasing a small piece of a company. This makes you a partial owner, entitled to a share of the company's profits, known as dividends. Stocks are typically associated with higher risks but also offer the potential for significant returns. The stock market, where these transactions occur, is a dynamic, ever-changing environment, influenced by factors like company performance, economic indicators, and even global events. Section 2: Bonds - The World of Fixed Income Unlike stocks, which represent ownership, bonds are debt instruments. When you invest in a bond, you're essentially lending money to an entity, be it a government or a corporation.