The reason bonds get mentioned so much along with stocks is that they are often use to balance an investment portfolio. Bonds are typically lower risk than stocks, but they usually yield a lower return. Many investors who invest in the stock market will have a portion of their portfolio allocated to bonds.

There are a few different aspects to every bond:

1. The face value / par value of a bond is the amount of money that will be paid back to you at the time of maturity. When a bond is originally issued, it usually sells for face value. But, the face value does not represent the cost to buy the bond. The price to acquire a bond will fluctuate depending on different market conditions. If a bond is selling for more than face value, it is selling for a premium, and if it is selling for less than face value, it is selling at a discount.
2. Coupon. When you own a bond, you will earn interest. The coupon rate is the percentage of face value that you earn in interest every year. For example, if the face value is $1,000 and the coupon rate is 7%, then you will earn $70 in interest every year until maturity.
3. The maturity of a bond refers to a specific date in the future when you as the bondholder are returned the principal / face value of the bond.

When you own company stock, you are jut one of many owners. Just because you own part of a company doesn’t mean that you have a role in the every day decisions in running the company. You can’t just start telling Steve Jobs what he’s supposed to do. Instead, what happens is that for each share that you own, you will have a vote in electing the board of directors. The management in turn is supposed to work to increase the value of your shares for you.

The risk of investing in stocks varies according to several factors. However, whatever the market conditions buying stock in huge companies like General Electric will be safer than buying stock in an Internet start up company.

Shares of stocks can be bought and sold on the stock market.  There are many stock markets in the United States as well as other countries around the world. Major stock markets include the Dow Jones Industrial, NASDAQ, Tokyo Stock Exchange, London Stock Exchange, and the Shanghai Stock Exchange.

The categories above are quite different from each other and each requires different levels of capital and expertise. For the typical investor, the first real estate investment that is made is the purchase of one’s own home. The next most common real estate investment is to buy another single residential unit be it a condo unit, townhouse, or house to rent out to an individual or family.

Owning your own home: For many people, owning your own home is one of the biggest investments that you’ll make. Let’s tackle how much money you’ll need to purchase your first home. One of the biggest obstacles to home ownership is the down payment. First time home buyers may be able to take advantage of a government-insured FHA loan which will require you to put up a 3% down payment plus some closing costs. To qualify for a conventional mortgage, lenders will require around a 20% down payment. That’s quite a lot of people for most people even at today’s values. Luckily, many lenders will still give you a loan with you putting down as little as 5%. However, you will be required to purchase PMI (private mortgage insurance. This is a recurring monthly payment that you’ll have to pay until your equity in your home reaches over 20%. The less money you put down, the great risk you are to default on your loan in the lender’s eyes.

So much will depend on the current state of the real estate market. The amount of money available on the credit market for consumers to borrow will vary. The nature of the market will define the lending requirements. Aside from the down payment, another important factor that will affect you is the interest rate. This also depends on a lot of different variables. You can think of the interest rate as the cost of borrowing money. The higher the interest rate, the more you will have to pay in your monthly payments.