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What is the difference between stocks and bonds?

InvestingWarren Team

Quick answer

Stocks represent ownership (equity) in a company; bonds represent debt, you're lending money. Stocks have higher long-term returns (~10%) but more volatility; bonds are steadier (~5%) and pay regular interest.

Stocks vs bonds: ownership vs lending, returns vs stability.
Stocks vs bonds: ownership vs lending, returns vs stability.

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