Stocks, Bonds, Pooled Funds – What Are Their Differences?

It’s back to basics once again for our readers. Why go back to basics? Because only less than 2% of the Filipino population are investing.

It is presumed that almost half of that 1% are plainly putting their money in financial instruments such as stocks, funds, and bonds without even knowing the basic principles and concepts of investing. This shows how much the financial education sector have to work on to teach more Filipinos across the country and abroad.

For today’s post, I will be sharing video clips from various resources like Pesos and Sense, Investopedia, and InvestingAnswers.

What Are Stocks and What is the Stock Market?

More Filipinos are starting to become aware about the stock market and are hearing about the good benefits of investing in it for the long-term.

I have been receiving the same question “What are stocks and how to invest in the stock market?” from many of our blog subscribers after several news articles about investing were featured on newspapers and TV recently. Proof that the broadcast and print media have the influence to promote financial literacy to its viewers.

Here’s our friend and fellow advocate Aya Laraya with his simple and brief explanation of the basics of stock market investing in Filipino (Tagalog-English).

What Are Bonds?

Government and corporations use this method of debt investment to finance their different projects.

In one of my articles about bonds, we mentioned how investing in this instrument can help the capital preservation goals of many Filipinos, OFW’s included. This article was published when government retail bonds were offered at higher return rates.

However, amidst the booming economy of the Philippines, banks and government institutions have reduced their rates in their fixed income financial products in the past few years. The Philippine Government 3-year bond yields even plunged to an all-time low of 1.625% coupon returns.

Now let’s hear a good voice from Investopedia discussing about this type of debt instrument called Bonds.

What’s the Difference Between Stocks, Bonds, and Pooled Funds?

And to summarize what stocks, bonds, and pooled funds are, let me share with you a video clip from InvestingAnswers.com.

The video clip also clearly differentiates the meaning of index, mutual, and exchange-traded funds.

Did you enjoy our short learning session today? What are the terminologies and concepts that you still don’t understand? You can share your ideas and comments below to our readers.

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