Bonds

Bonds are simply loans in the form of a security: the bond issuer is analogous to the borrower, the bond holder akin to the lender, and the coupon equivalent to the interest. Bonds can be issued by a number of organizations including municipal authorities and large corporates.

Bonds and equities are both securities, but the major difference between the two is that stock-holders are the owners of the company (i.e. they have an equity stake), whereas bond-holders are lenders to the issuing company.

Another difference is that bonds usually have a defined term, or "maturity", after which the bond is redeemed, whereas stocks may be outstanding indefinitely.

Bonds are bought and traded mostly by institutions like pension funds, insurance companies and banks. Bonds do suffer from less day-to-day volatility than stocks, and bonds' interest payments are higher than dividend payments that the same company would generally choose to pay to its stockholders.

Mutual Funds A mutual fund is a type of investment scheme which pools funds from numerous investors with a view to a collective investment.

Equities We only recommends equities that have been thoroughly researched by our analyst teams in "small cap" or "large cap" companies.

Commodities Oil, Precious Metals, Base Metals, Wheat, Corn, Cocoa and even Palm Oil are all part of the commodities complex whether grown, mined or pumped.

Bonds are liquid — it is fairly easy to sell one's bond investments, though not nearly as easy as it is to sell stocks — and the certainty of a fixed interest payment twice per year is attractive.

Bondholders also enjoy a measure of legal protection: under the law of most countries, if a company goes bankrupt, its bondholders will often receive some money back (the recovery amount), whereas the company's stock often ends up valueless.