Does this have anything to do with stocks being a substitute for bonds and vice versa? Also, would you expect a stock to be a substitute or a complement?
I say substitute. Another reason I say that is because of the risk involved in bonds vs. stocks. With stocks at least you “own” part of the company in which you invested. With bonds you only “own” part of the debt and the company “owes” you because you lent them your investment. So, when young, bonds are a great way to go if you have time and money to be risky with. As people age and require more security, they can substitute the investment in bonds for the security of stocks. Not that either are 100% secure.
Is that accurate or false??? Thanks in advance...
2007-12-02
12:03:22
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6 answers
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Aww, too bad
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