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Part: II UNDERSTANDING RISK AND YOUR PRO... > Fixed Income Investments: Building a...

Chapter 8. Fixed Income Investments: Building a Bond

As an investor, you have a choice of being either an equity partner or a lending partner. If you purchase a stock or a stock mutual fund, you are purchasing equity in a company. If you purchase a bond or a bond fund, you are actually lending money to the company, government, or municipality for a certain period of time at a specified interest rate. As an equity owner, you have a say in how the company is run by being able to vote the power of your shares. As a bondholder, you don't have voting rights. but you stand in line ahead of stock holders if the company you're investing in goes out of business.


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