Stocks and Bonds

Stocks and Bonds
Stocks and Bonds — Use a Variety of "Materials" to Build Your Investment Portfolio

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Use a Variety of "Materials" to Build Your Investment Portfolio

Building anything requires careful thought and planning. You need to decide what you’re building, what you want it to do and what materials would be the best. Building an investment portfolio is the same; there are two primary materials — stocks and bonds.

When you build an investment portfolio, there are two primary materials — stocks and bonds.

In this section, you’ll learn the difference between stocks, which represent ownership in a company and bonds, which are like IOUs that pay interest for a specific period of time. Both investment types have pros and cons, including different levels of risk. Learn the benefits of a diversified blend of stocks and bonds based on your risk tolerance and time horizon.

You might already own stocks and bonds and not even know it. Some of the ways people invest in stocks and bonds are through mutual funds, IRAs or the investment options in their employer-sponsored retirement plans. For a more sophisticated investor, a brokerage account allows you access to stocks and bonds through mutual funds, and also allows you to invest in individuals securities.

 

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