To really look at the difference between stocks and bonds you have to understand the basics of each. Definitions make up our world and help us with understanding, so here we go. In common parlance, we can compare a company to a house. When a person buys a house, they have a deed, which is a legal declaration and description of the property. Stocks are like owning a portion of the deed for a company.
So, in a simple example, if a company has a book value of $100,000 and they want to sell 100 shares, the shares might be considered worth $1000 each. In exchange for the share, a shareholder, also known as stockholder, would be entitled to a share of any net profits the company makes. Using our simple example, each shareholder may get 1% of the net profit as a return on their investment. If the company makes no money, there would be no return on investment (ROI). In the event of a loss, the company might be worth only $90,000 and the shares might then sell for $900. This is an overly simplified view, but this is for illustration purposes only.
Using the same scenario, if that same company wanted to raise money, but not sell shares, they might sell bonds. Generally, a bond is considered a loan to the company. (Bonds are also issued by municipalities, from local governments to federal governments.) This loan might be that the company will sell you a $1,000 bond for $800 and the bond would be worth $1,000 when it matures (in 8 to 10 years typically.) During the maturing, the company also agrees to pay a fixed amount every six months. The fixed amount usually is tied to the current interest rates but does not have to be.
So what are the advantages and disadvantages of each of these? Unless a company goes bankrupt, you are guaranteed to have a return on investment with a bond. They are more stable, predictable and safer investments.
However, bonds aren’t usually giving you large returns. Another disadvantage is that they are not liquid, and you can pay a penalty for cashing them prior to their due date. Stocks, on the other hand, can give you greater returns, but carry a higher risk with no guarantees. They are more liquid, so if you need to get to your money more quickly, there are no consequences like penalties, just the standard fees involved in your transaction.
In other words, a bond is like a tortoise and a stock like a hare. Remember though, sometimes it is rabbit season, and your hare may be scalped.
Normal advice given to investors is to have more money in the higher risk stocks while you are younger and to gradually shift to the more conservative bonds as you get closer to retirement.
Mayfair Options – Binary Options Trading
There are many different binary options platforms that traders can choose from today. Selecting from all of the available broker options can be challenging. The purpose of reviewing brokers such as Mayfair Options is to help traders learn as much as possible prior to making a selection.
This broker is recognized throughout the industry for providing a great platform, but also for offering their clients a wide variety of impressive resources.
Account registration can be carried out online and doing so costs nothing. Traders should instantly recognize that the Mayfair Options platform differs from the copy-cat platforms that we often see used today.
- Traders can start trading by depositing only $250.
- This small minimum makes it possible for anyone to trade binary options.
- Investment minimums start at just $5.
- These low start-up costs make Mayfair Options great broker option for new traders.
Mayfair Options Offers…
Currently, this broker offers 184 underlying assets for use with the basic binary option, 60 Seconds, Long Term, Pairs, and One Touch trades. There are a lot of expiration times to select from and for that reason option accessibility is unlimited. Trades can be additionally tailored through the use of the optionally available Sell, Rollover, and Double Up functions. These extras are available on many open contracts.
- Minimum Deposit: 250 USD/EUR/GBP
- Minimum Withdrawal: 100
- Withdrawal Cost: One free each month, extras cost 30
- Return Percentages: 60-85% (100-500% on One Touch)
- Banking Methods: Credit card, Debit Card, Bank Wire, Online Wallet
- Mayfair Options is respected by traders and industry experts, despite the fact that they are not yet one of the veteran brokers.
- Their platform is uncomplicated and should present no problems to new traders.
- This broker allows traders to start out with a small initial deposit, after which they can trade using small investment amounts.
- Their reference library and daily market analysis should prove extremely beneficial to all traders.
- Their asset index is huge, allowing traders to trade with preferred assets.
- The Mayfair Options platform is open to all adult traders, regardless of location. (Yes, this does include U.S. traders.)
- Customer service is available 7 days a week.
- There is only one account type. All traders are treated as valued clients.
- Dedicated account managers are paired up with traders. These individuals can provide all types of guidance and assistance.
- The extremely large asset index should seem a bit daunting to first-time traders.
- The market analysis is wonderful, but the live market news is not provided.
- English is the only platform language for the time being. (There are plans for additions though.)
Mayfair Options is going to be a great fit for all traders, regardless of skill level. They have rapidly gained a solid reputation for being a top-tier binary options broker.
They provide exceptional customer service, daily market analysis, a loaded resource library, and committed account managers. Some traders could feel that the asset index is somewhat overwhelming, but there is no need to focus on every asset.
It will not be easy for traders to find a broker that provides more than what Mayfair Options does. Why not check them out for yourself to see if they can assist you today.
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