Shares | Bonds | |
---|---|---|
Meaning | Represent ownership in a company. | Represent debt owed by a corporation or government. |
Income | Potential for dividends and capital appreciation. | Fixed interest payments. |
Fixed return | No fixed return; dividends can vary or not be paid at all. | Yes, a fixed interest rate is paid until maturity. |
Risk | Higher risk; value can fluctuate significantly and loss of investment is possible. | Lower risk compared to shares; more stable and predictable, but still subject to market conditions. |