Investing is defined as making a direct investment in a firm or in shares in a corporation or in a government instrument. To invest is also to put money into an interest bearing account with the intention of receiving a return/profit in the near future. Simply put, to invest in stocks means buying an economic asset or an entity with the intention of earning a profit from the sale or the increase in value of that asset over a specified period of time or an appreciating value.

Most people use the terms investing in stocks interchangeably. However, there are differences between these two terms. An investor is a person who makes or owns investments. On the other hand, a stock investor is a person who buys and sells stocks or bonds for the purpose of earning income. Both have distinct characteristics that set them apart from one another.

The major difference between investing in stocks and bonds lies on the period for which they are used. Stocks are usually used for day-to-day purchase and sale of the stocks by investors. They are purchased when the price is low and sold again when the price is high. The advantage of this method is that you can buy and sell the stocks several times in a day without having to stay at the trading terminal all day. However, it is disadvantageous as the profits are only realized when the prices are high.

On the other hand, bonds are primarily meant for lending money to other banks or to other financial institutions for the purpose of raising funds. Bonds are generally issued by governments or by public enterprises. Since banks or financial institutions are the borrowers of these securities, bonds have to be secured by loans provided by banks and other financial institutions. This makes investing in bonds somewhat different from investing in stocks since you need to raise funds in order to purchase the bonds.

A lot of people have the wrong notion that investing in equities is very risky while investing in bonds is very safe. There are many reasons why the two methods differ but the bottom line is that both these options involve risks and should be taken seriously. You should not invest all your savings in stocks because there are high chances of losing your shirt in a single day. On the other hand, you should not put all your savings into bonds because there is no guarantee of return. It is always better to follow an option that gives you a good return at a reasonable risk.

In conclusion, there is no such thing as an ideal investment strategy. Every investor needs to find the best investment strategy that matches his/her needs and personality. There are many books available that can help you find the best investment strategy that suits your needs and style, making it easy for new investors to start investing in the financial markets.