| Basis | SHARES | BONDS |
|---|---|---|
| Meaning | Ownership of the company and a right to dividends | Lending a company/government money with expectation of interest payments |
| Source of returns | Increase in Share price Dividends | Interest Payments |
| Average returns | Higher than bonds over mid - long term. Returns are limitless based on success of company | Lower than shares over mid - long term. Set returns, will not increase. |
| Is the return guaranteed? | No | Yes |
| Level of risk | High | Medium |
| Initial Investment required | Can start investing with small amounts | Depending on broker may require a significant minimum investment |
| Effect of inflation | Higher share price | Lower bond price and reduced returns |
| Effect of currency | Higher share price | Lower bond price and reduced returns |
Shares vs Bonds
Stocks vs Bonds newspaper headline with dice and stock charts