What is the difference between stocks and bonds?

Shares represent partial ownership of a company. By purchasing shares, you become a shareholder and have the right to participate in the company's profits and decisions. The value of shares can fluctuate in the market and you can earn profits through an increase in the price of the shares or through dividends. On the other hand, bonds are debt instruments issued by government or corporate entities. When you buy bonds, you lend it to the issuer and they simultaneously agree to return it to you on a particular date in the future, along with the applicable interest. Unlike stocks, bonds have a fixed return and are generally considered safer investments.