Bonds vs Stocks Research paper

In the beginning, there was no real stock market. However stock exchanges did take place in smaller groups and corporations. This all took place during the 1700's where stocks were already around for a long time before that but it wasn't really popular in the United States. Stocks originally started as auctions where traders called out names of companies and the shares available. There was a auction that took place and the shares went to the highest bidders.

Thibodeaux, W. (2017, April 19). Advantages & Disadvantages to Issuing Bonds in Order to Raise Capital. Retrieved from Pocket Sense: https://pocketsense.com/advantages-disadvantages-issuing-bonds-order-raise-capital-3899.html

So what does this really mean? It means if a company puts their stock up for sale on the market you can buy a partial ownership of the company. Your portion of ownership depends on the amount of shares you purchase in a particular company. When you purchase a share of the company you own that percentage of everything the company owns and makes and can have a decision on the company. The two most common types of stock are common, the typical traded stock that everyone is use to and comes with voting rights, and preferred, doesn't usually come with voting rights and typically offers some form of guaranteed fixed dividend forever. Features of stocks are easy to buy and sell, no guarantee of return, may make huge profits fast or lose value just as quick, requires monitoring. Stocks are traded on "The Market", meaning they have to be bought and sold through a stock market. With regulations just anyone can't buy or sell on the market, it has to be a licensed broker to carry out the transaction. Stock buying and selling can take a lot of time and research to make the most profit. If you can find a broker, you trust they can really help you with your investment. Stocks are one area of investment, more so than bonds, you need to be sure you can stand to lose the money if the market doesn't work

For many people, the star market is a popular method for obtaining money quickly. Despite the risks, many people invest their money in stocks. The stock market allows the public to buy shares of a company, or a stock. These shares come in the form of an official document, and grants you a small fraction of the company you invested in. As companies do well, their stocks are worth more. Stocks can be bought and sold through the help of a stockbroker. The goal is to buy a share of a company, then later sell the share for more money than you bought it for. However, the market is risky; this is proven by multiple crashes in the market, resulting in loss of money.

The stock market is a great way to buy part of a company & gain or loose money depending on how the company is making money buy buying a share. “The stock market is owning a small piece of the company; the stock market is owning a piece of a business” (Christie 5). Therefore, investing in the stocks is a great idea when prices are high. Furthermore, it is a hard job to keep up with everything needed to know for the job. Investors and brokers are the one who do the buying

The “Stock Market” is a term that actually describes several markets such as the New York Stock Exchange NASDAQ, where the stocks of companies are traded. Shares in a company are sold and the shareholders then become part owners of the company. Offering shares of stock raises money for continued research and development of company products or services.

The stock market is an ever changing, popular way for many Americans to invest their money somewhere other than a bank. The reason behind that is because the interest banks pay you for your money is incredibly low. Stocks, on the other hand, give an investor a chance to make a better return on their money. At a higher risk of course. Some may think buying stocks are like pulling the lever on a slot machine, putting your money in randomly and hoping for the best. That is not so, yes there is no guarantee of a return when buying stocks but there are many ratios that a potential investor can use to better their odds on making a profit.

A stock market is a place where shares or stocks in a company are bought and sold. An example of a stock market is the New York Stock Exchange.

Being a stockholder can have great rewards like a viable source of income, or an eggs nest for retirement, however it does have its downsides as well. Owning stock in a corporation bears the risk of losing all one’s investment if the company goes bankrupt. Aside from financial benefits, owning stock allows stockholders to have a voice (however small it may be) in the company’s direction.

The stock market works by increasing the value of stocks based upon multiple factors. One of the factors is company performance. The better the company is doing the more stocks will increase and vice versa. Another factor is the demand. The more demand the bigger the price and also vice versa. So to maximize the amount of money you get from a stock you need many people buying that stock and having the company do well.

This will enable the company to raise huge amount of funds by issuing bond. The main advantage is that the company is not required to pay principal until maturity time; risk involved in bond issue is less which will reduce the cost of loan (Www.boundless.com, n.d.). Debt financing will not dilute the ownership and any decision related to the company can be made fast without any intervention, company will have more independence to make reinvestment of entire profit earned into the future development of the business (Inc.com, n.d.). In this case, debt holders do not have any claim over the economic profits apart from the interest payment, and debt market is more efficient (Bradshaw, 2013). Fixed amount

There are a few terms new stock investors should learn before actually beginning to put money into the stock market. You hear words like “shares”, “assets”, and even “earnings” when you watch or listen to people on the television. Shares are a percentage of the company, if you buy a share; you own a small percentage of it and its earnings. Earnings are all the money that the company makes. Assets involve all the company owns, for example, trademarks, equipment, and even the buildings their workers work in. Companies put their assets and

The above links address some of these issues. In other words, the bond market is a market in which the bonds of corporations and governments are traded (i.e., banks, etc.) and transacted in various settings (i.e., banks, private sectors, government agencies) and in various ways (i.e, over the counter, electronically, telephone, etc.) www.econ100.com/eu5e/open/glossary.html.

Stocks (or shares), by definition, are shares of ownership in a company. By purchasing stocks in a company, the investor becomes a part owner, and thereby owns a percentage share of the company’s after tax profits. Stocks/shares have two key characteristics: 1) they can be issued in small denominations: an investor can purchase as many or as few shares in a company as he/ she wants, thereby becoming a

Gittman (2004, pp. 312) divided stock into two types, such as common stock and preferred stock. He also showed that dividends are the outcome of investment. So, common stocks are an ownership claim against primarily real or productive asset (Higgins, 1995), but he also said that if the company prospers, stockholders are the chief beneficiaries, if it falters, they are the chief losers. Smith (1988) presented that stocks are one of the most popular forms of investment. People buy stocks for various reasons: some are interested in the long-term growth of their investment by buying low priced stock of a new company in the hope of substantially growth of share price over the next few years. Another reason he suggested that in a well established firm stockholders expect the stock growth will be stable over the long run. (Smith,1988).