When it comes to investing, there are a variety of money making opportunities out there.
Two of the primary investment avenues that people tend to go are stocks and bonds.
What these prospective investors should know is that a solid investment portfolio will include both of these things, since each serve different purposes.
Growth potential with stocks When people invest in stocks, they are putting their own financial future in the hands of the markets.
Those markets can be scary and volatile at times, so this makes for a somewhat risky investment strategy.
It is not all bad, though, because some stocks are quite stable and can offer repeated growth.
Likewise, there are some smaller stocks that have the ability to explode in value, bringing huge returns for the lucky investors who hop on board.
The nice thing about investing in stocks is that investors are not locked in for a set period of time and they can sell the stock when they feel the time is right.
The stability of bonds With bonds, investors are going after something completely different.
Government bonds remove the uncertainty, because the government is quite good at paying out their bonds.
Savvy investors know that their money is going to be tied up for a period of years, but they invest the money anyway.
This takes away some of the risk and leaves those people with at least a portion of their portfolio tied up in something that is going to bring a return.
The downside is that they won't be able to have access to that capital for the set number of years and the return on these is somewhat low.
Still, there is a place for bonds, since it can balance out a portfolio to some degree.