Found on the beach in Somerset

There is a clear difference between owning shares and bonds When you have ‘shares’ in a company, you own a part of the company

When companies issue bonds, they are often referred to as Corporate Bonds In the UK, when the government issues bonds they are sometimes called ‘Gilt-Edged Securities’ or Gilts for short

When a company or a government require extra money they may issue a ‘bond’ in order to borrow the money they need A bond is therefore a form of IOU that can be traded by investors and usually has a fixed regular income

The terms ‘stocks’ and ‘shares’ tend to be used somewhat interchangeably However, there is a subtle difference The term ‘stocks’ should be used when discussing ownership of companies in general And the term ‘shares’ is used to describe ownership of a specific company