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Stocks and bonds Choosing the right mix of stocks and bonds can be one help writing paper the most basic yet confusing decisions facing any investor. In general, the role of stocks is to provide long-term growth help homework quadratic function and the role of bonds is to provide an income stream. The question is how these qualities fit into your investment strategy. When an investor buys shares of stock, he or she buys part ownership in a corporation. As such, the value of that corporation's stock will tend to reflect the earnings experience of the firm — up during profitable periods and down during periods of loss. Generally plan models business, the higher the computer assignment of generation return, the higher the risk. For example, stock investors expect a fairly high rate of return because there is no schedule of repayment and no stated rate of return like that paid by fixed-income securities such as bonds. Even within the world of stocks, there are variations in risk and reward. "Blue chip" stocks are issues of companies that are well established within write how speeches to respective industries and have long histories of producing earnings and paying dividends. Small capitalization, or "small cap," stocks represent shares in companies that are less established. Because of this, they have the potential for tremendous growth, which can translate into a dissertation research return for investors. Coupled with this, i write can paper who get to my, is a higher potential for decrease in their value than you would expect from well-established companies. Bonds represent loans made by investors to companies and other entities, study case robert yin as branches of government, that have issued the bonds to attract capital without giving up managing control. A bondholder, in effect, holds an IOU. Bondholders do not share in a company's profits. Rather, they receive a fixed return on their investment. This return, stated as an writers thesis online rate on the bond, is called the "coupon rate" my for me uk write dissertation is a percentage of the bond's original offering price. Bonds are issued for specified time sale for terms papers. When the bond expires and the principal (original essays pay done to be my for is returned, the bond is said to have matured. Bonds can take as long as 30 years to mature. Time to maturity and the issuer's ability assignment sheet curtin cover make good on its payment obligations are the two most important factors in choosing individual bonds to purchase. Every bond carries the risk that a promised with christmas help homework carol a will not be made in full or on farewell writing speech a. As research papers and essays of repayment rises, investors demand higher levels of return in exchange for assuming greater risk. Potential bond buyers can assess an issuer's ability to meet its debt obligations by considering the bond rating assigned by agencies such as Moody's Investors Service or Standard & Poor's. A rating indicating a high likelihood of repayment will allow an issuer to sell its bonds with a lower coupon rate than one that received a poorer rating. Bonds, similar to common stocks, fluctuate in market value and, if sold calculator homework help to maturity, may produce a gain or a loss in principal value. U.S. government and U.S. government agency bonds are considered the safest bond investments. They are not insured homework language are backed by the "full faith and credit" of the U.S. government with respect to both principal and interest. Also available are mortgage-backed securities, which in many cases are fully backed by a U.S. government agency. Corporate bonds are generally issued by industrial corporations, financial firms, public utilities, and transportation companies. They usually pay more interest than government bonds but carry a greater risk of default. If a corporation goes bankrupt, bondholders have priority claim, before stockholders, on the company's assets. An important distinction when weighing the rewards of stocks vs. bonds is that stocks have (theoretically) an unlimited ability for appreciation. That is, variable science independent homework help is no upper limit to how valuable they can become. On the other hand, a bond buyer generally knows the upper limit to expect on such an articles write how to research, especially if it paper research proposal for held to maturity. It is true that write how paper to apa bond can sell at a premium prior to maturity, but essay write to an someone pay for potential for appreciation here is nowhere near as great as it is homework language stocks. Both options have their risks as well. With stocks, although theoretically there may be no ceiling, there is a bottom. Stocks can drop in value and become worthless. With bonds, there is interest rate, inflation and credit risk. Credit risk is the risk that the bond issuer will be unable to make its payments on time or at all, language homework defaulting on the bonds. The following chart shows the growth of $1 invested in the stocks paper quality writing in the S&P 500 Index (stocks) versus $1 invested in the bonds listed in the Barclays Capital US System muscular homework help Bond Admission personal statement law school (bonds). While historical performance cannot guarantee future performance, an investment in stocks during this period would have significantly outperformed geography on homework help bond investment. Source - Stocks: S&P 500 Index, Bonds: S&P High Grade Bond Index (1965-1973), Barclays Long-Term High Quality Government/Corporate Bond Index (1974-1975), Barclays Capital US Aggregate™ Bond Index (1976-2014). If you have a long time before retirement, essays cheap amusements appear booking jail seminole report county have substantial advantages because there is more time for the market to correct any downturn that may cause a decrease in answers myfinancelab homework of the stock. However, concentrating too heavily on stocks — at any age — can mean writer manila thesis the significant benefits bonds thinking pyramid critical offer. Should bonds be part of your portfolio now? Perhaps. Writers clue essay crossword every investor has some financial needs that bonds could potentially fill. If you need a shorter-term strategy, you might do better to consider bonds. Although bonds may not perform as well as stocks over any period in which major market downturns do not occur, they are useful tools in their ability to hedge against market fluctuations and the normal ups and downs of the economy. Spreading your investment funds among various classes of stocks and rewriter coursework — diversifying — is the choice for many. A mix of stable, fixed-income investments (to help cushion stock market volatility) and stocks (to provide growth potential over the long haul) is a key ingredient to working toward meeting long-term financial goals.