Stocks & Bonds: A Beginner's Guide to Essential Investments

By far, stocks and bonds are two of the most prolific types of securities available on the market. They are basic staples of both small and large investors the world over. But with a myriad of other choices at hand, why do so many investors choose to place their money into these particular instruments? Among the numerous reasons, certainly at or near the top of many lists (whether admitted or not) is that their basic concepts are fairly easy to understand. A stock certificate gets you partial ownership in a company and provides a return on the price you paid for it – hopefully. A bond is simply a loan you make to an entity, and it will also give you a return on your money. Simple, yes? Unfortunately, what isn't so simple is choosing the right one.

Stocks and bonds can generally be bought and sold quickly and conveniently. And historically, their track records of performance have been good. But neither of those characteristics should be substituted for basic, fundamental knowledge. We highly encourage you to study the information contained in this Section and put it to use. But when buying stocks and bonds, you're advised just as strongly to study the company and the market that you're investing in. Learn all you can about them. It's the only way you'll truly be able to evaluate whether their offerings are worth risking your money on.