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August 28, 2025

Let's say you invest $1,000 in stocks and potentially earn an average return of 8% over a year. After one year, you would have $1,080. If you invest $1,000 in bonds with an average return of 4%, after one year you would have $1,040. So, in this example, stocks could give you a higher return – $40 more than bonds.

Risk means the chance of losing some or all of your money. Return is how much money you earn from your investment. Stocks can be like a fun rollercoaster that goes up and down quickly, while bonds are like a smooth train ride that goes slowly and steadily. The fun rollercoaster can sometimes be scary, but it can also take you higher, which means you could earn more money!