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Originally Posted by geos
What is the difference between a bond and stock for example?
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A stock is ownership of part of a company. Say a company has 100 shares and you buy one, you own 1% of the company. If the company does well, you get a return for your investment. If it does poorly, you may lose money (like what's happening to most of us right now).
A bond is a set amount that the company borrows from you, usually to raise funds for a purpose. The bonds usually have set interest rates and length of time to pay back. So if you own a bond, you will be paid back interest on the principal (the amount of the bond) every year. When the bond comes due, you will be paid what the value of the bond is.
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