What is the difference between stocks and bonds?

Stocks and bonds are two common types of investment instruments. A stock represents ownership in a company. When someone buys a stock, they become a partial owner or shareholder of that company and may earn returns through dividends or an increase in the stock's value. On the other hand, a bond is a loan given to a company or government. When someone buys a bond, they are lending money to the issuer and earn returns through fixed interest payments. Stocks are generally riskier than bonds but offer the potential for higher returns. Bonds are considered safer but provide more stable and lower returns. Stocks are equity investments, while bonds are debt investments.