A delayed payment or cancellation feature reduces the amount that investors will be willing to pay for a bond. Voting rights. The holders of stock can vote on certain company issues, such as the election of directors.
Bond holders have no voting rights. There are also variations on the stock and bond concept that share features of both. In particular, some bonds have conversion features that allow bondholders to convert their bonds into company stock at certain predetermined ratios of stocks to bonds. This option is useful when the price of a company's stock rises, allowing bondholders to achieve an immediate capital gain.
Converting to stock also gives a former bond holder the right to vote on certain company issues. Both stocks and bonds may be traded on a public exchange. This publication is for information and general circulation only. It does not have regard to the specific investment objectives, financial situation and particular needs of any specific person who may receive it.
You should seek advice from a financial adviser. Past performance and any forecasts on the economy, stock or bond market, or economic trends are not necessarily indicative of the future performance.
Views expressed are subject to change, and cannot be construed as advice or recommendations. References to specific securities if any are included for the purposes of illustration only. This publication has not been reviewed by the Monetary Authority of Singapore. The difference between stocks and bonds explained. What about risk? Complementary assets Bonds and stocks can work well together, as part of a well-diversified portfolio.
Choosing the right investment Before investing in either bonds or shares, it is important to ascertain your tolerance of risk. Download article. More to read and more to watch. Understanding investment grade and high yield With varying degrees of risk and reward, where on the spectrum will you invest? How interest rates affect bonds One goes up, the other goes down. Find out why and how to protect from interest rate risk. Bond jargon explained Learn the language of bonds. Our video explains all the important terms.
Why fixed income is often a smart investment choice Income and stability are among myriad benefits bonds can provide.
How yield-to-maturity works Understand why yields and bond prices move in different directions. Understanding credit risk and ratings Bonds differ in their credit qualities. Discover the risks and how to manage them. Introduction to Fixed Income.
Types of Fixed Income. Understanding Fixed Income. Fixed Income Investing. Risks and Considerations. Table of Contents Expand. The Bond Market. The Stock Market. Bond Market vs. Stock Market: An Overview It's time to invest your money. Key Takeaways A stock market is a place where investors go to trade equity securities e. The bond market is where investors go to buy and sell debt securities issued by corporations or governments.
Stocks typically trade on various exchanges, while bonds are mainly sold over the counter rather than in a centralized location. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.
Investopedia does not include all offers available in the marketplace. Related Articles. Markets Capital Market vs.
Stock Market: What's the Difference? Partner Links. Related Terms Capital Markets: What You Should Know Capital markets are venues where savings and investments are channeled between suppliers and those in need of capital.
Stock Market Investopedia The stock market consists of exchanges or OTC markets in which shares and other financial securities of publicly held companies are issued and traded. What Is a Primary Market? A primary market is a market that issues new securities on an exchange, facilitated by underwriting groups and consisting of investment banks. Understanding the Bond Market The bond market is the collective name given to all trades and issues of debt securities.
Learn more about corporate, government, and municipal bonds. What Is the Money Market? The money market refers to trading in very short-term debt investments. These investments are characterized by a high degree of safety and relatively low rates of return. Investopedia is part of the Dotdash publishing family. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.
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