Equity yield more return than investing in bonds ?

Question

Equity yield more return than investing in bonds ?

Answer 1

Historically over the long term equities yield more than bonds. On a short term basis bonds could yield more depending on how the stock market is performing during that short term.

What you should invest in depends on your risk tolerance level.

Answer 2

It depends on which stocks and which bonds you choose to invest in.

According to one article I've read.  If you had invested your money 10 years ago in S&P500 companies.  Then your return now would be less than zero.  In other words you would loose money instead of profiting from your investment.

But if you had invested your money in bonds instead.  Then your gains would've been positive.

http://www.safehaven.com/article-10695.h...

Of course, not every company and not every bond is the same.  If you are lucky in selecting good companies and  unlucky in selecting bonds.  Then stocks may turn out to be more profitable than bonds.  But given the record of socks and bonds over the last ten years.  I'd say such luck that goes against the average is unlikely to happen.

This is true only for long term investors who buy and hold for a very long time.  But many people try to time the market and profit from stock price volatility by buying low and selling high.  And if you are good at timing the market.  Then you can make more money in stocks than in bonds.  Because stock prices are more volatile than bond prices are.

Answer 3

Sure and more risk.

Remember more return , more risk.

Bonds that give you are smaller return are safer, have much less chance of losing principal than equities, and usually better than interest on a savings account or a CD from a bank.

Answer 4

Unless you are day trading in this market, biting your nails every moment, your money belongs out of equities.  In order to trade in this market you have to catch falling knives on a regular basis?  You wear kevlar gloves?

The market makers are watching for the gullible every day and sucking up their cash!