Stocks Versus Bonds

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Advantages and Disadvantages of Stocks and Bonds

Advantages and Disadvantages of Stocks and Bonds
Stocks and bonds qualify as the two major classes of assets that are used by investors in planning their portfolios for investment. Stocks offer the investors an opportunity to have a stake in the company, whereas the bonds are affiliated to the loans that are made to a company. Generally stocks are considered to be very volatile and much risky to invest in as compared to the investment in bond (Alexieff, 2014). However there exist different stock and bond types that have with them varying volatility levels and the risks also vary.
Types of Stocks and Bonds
There exist different types of stocks and bonds
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A stock holder has the right vested upon him to sell the stocks at a much higher price as compared to what he paid for, whenever he or she deems it necessary.
A stock holder has a voice in the company as they are in a position to contest for the post of being the directors in the organization, depending on the share capital that has been invested by a shareholder in the company.
A shareholder in a company has the right to get involved in the bonus shares that have been declared by the company. Bonus stocks are the additional stocks that are assigned to the stock holders apart from the dividends (Alexieff, 2014).
Investing in stocks enables one to increase the chances of obtaining credit facilities from financial institutions like banks and the macro financing institutions. The share certificate is used as collateral for the loans.
Stocks are inheritable, this means that one can assign the shares to the next of kin who is entitled to the stake in the company once the shareholder deems necessary to exit the company.
Stocks are also advantageous as the holders are only subjected to the limited liability in cases of a loss (Mobius, 2012). Therefore, in the event of liquidating the company, the shareholder is only liable up to the capital limits invested in the company.
Stocks can again be used as leverage for investment.
Disadvantages of Stocks
The following are some of the negative implications of stock: Getting the Last Payment
In the event of

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