According to The U.S. Economy website: "Stocks are a share of the ownership of a company. Initially, they are sold by the original owners of a company to gain additional funds to help the company grow. The owners basically sell control of the company to the stockholders...If the company does well, or even if everyone thinks the company is going to do well, the price of the stock goes up. This is how stockholders make a return on their investment. Conversely, if the company does poorly, then the shares decrease in value, and the stockholders lose their investment. In addition, many companies give a little dividend payment each year to the stockholders, providing extra income."According to Investor Words, a bond is: "A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. Generally, a bond is a promise to repay the principal along with interest on a specified date. Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does not gain any kind of ownership rights to the issuer. On the hand, a bond holder has a greater claim on an issuer's income than a shareholder in the case of financial distress."
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