Saturday, May 10, 2014

What type of person you are? Bond holder or Stock Holder?

There is various differences between Stocks and Bonds, but both are used for capital formation.
Diffen is also clear about the various dimensions we can find distinct about these two. 
In this post we are discussing about what kind of person you are and what should you be holding. 

Characteristics of Bond holder:

1.  They are not interested in trading bond after holding it. They might sell sometimes but not like the way stocks holders do.
2.  Bond holders wait for interest.
3.  They own the bond of public sector authorities, credit institutions, companies and supranational institutions.
4.  They are attracted by the constant return they will get in regular time interval.
5.  They avoid the risk as much as they can. They don't want to worry about the stock price they hold.
6.  The inflation worries bond holder.
7.  Interest rate affects the opportunity loss.
8. They are committed for long time. And it's really a long time.


Characteristics of Stock holder:
  1. Most of them are always the traders and rest don't care, they simply hold. More than that, they are owners of the company. They own certain portion of the company whose stock they hold.
  2. Interest rate, inflation and maturity periods are least considered by a stock trader. These things does not force the stock traders to hold or sell his stocks.
  3. They have their own rules for playing in stock market.
  4. Stock holders do not settle for certain amount of money for regular interval of time.
  5. They seek opportunity in loses. They lose sometimes and they gain sometimes but they don't depend on certain amount for stability.
  6. They diversify and they are always up to date.

They invest in both. They invest in bond as well as share. They choose to invest in highest paying bond and they learn when to sell. This is used for minimizing the risk.

Decided which type of people you are after reading the characteristics? Please feel free to express.

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