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There is an old saying that stock market provides better long term returns than bonds It's not a saying, it's statistics and it's a result of the nature of each type of investment. A bond is a loan. Generally, there are two outcomes for a loan, either it's paid back based on the terms of the loan or the borrower defaults and the lender loses money. The ...


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Several issues here. Firstly, you must include (past and future) dividends. If you include them, and compare the yields of European stocks to nonexistent interest on European bonds, you will see it generally doesn't make sense to invest in European bonds but makes a lot of sense to invest into European stocks. The index you was looking at probably is a ...


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The question seems to assume that bonds and stocks are nearly perfect substitutes for each other. They are not. They are exposed to different risks (market risk vs. interest rate risk, primarily) and have expected rates of return that correspond to the market's pricing of that risk. There are gains from diversifying across stocks and bonds, so I would say ...


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I'm not sure where you're getting your information. I used Yahoo Finance to plot the price of TLT (your long-term treasury bond ETF) against the yield on 30-year treasury bonds. The two charts are nearly perfect mirror images of each other, showing that as interest rates rise, the price of the bond ETF falls, and vice versa. So, it looks like it's not the ...


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I don't think rich people will prefer shares(stocks) with dividend or even bonds. Because in both these cases they will need to pay taxes. I think rich people will prefer non dividend paying , high growth stocks with high beta. For middle class should look at asset allocation


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Simple. Difference between shares and bonds: By owning bonds, you just hold some generic instrument that is supposed to yield a particular amount but you never know that in case of junk bonds. Quality bonds yield little, so the only way to make real money with bonds is by purchasing junk bonds (I won't recommend that, though) By owning shares, you own part ...


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Generally, all securities on the market can be analyzed for their dividends vs growth potential, and this is called Value on the high-dividend end, and Growth on the low-to-no dividend end; of course this is a continuous scale. Some investors prefer Growth investment, others prefer Value investments. It depends a lot on their personal situation, and their ...


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The central bank creates money and uses it to buy government bonds. This increases the amount of money in circulation. They do this when they feel there is too little money in circulation. (Interest rates are higher than they want.) When they feel there is too much money in circulation, they sell bonds and retire the money. This removes money from ...


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The total cash-flows received from owning the two bonds is the same. However, the semi-annual bond pays slightly quicker. Quicker payment of the same total cash-flows results in a higher yield.


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