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Stocks and bonds are two primary types of securities in the financial markets. Stocks represent ownership shares in a company, entitling holders to a portion of its profits and assets. Bonds, on the other hand, are debt instruments where an investor loans money to an entity (government, corporation, etc.) in return for interest payments and eventual repayment of the principal. Mutual funds invest in a portfolio of stocks, bonds, or both. Understanding these basics is crucial for investors navigating the capital markets.

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