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recovery
amount.
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price of the stock will normally rise as well. Thus, having greater return
on the stocks.
However, bonds provide a fixed return. In fact, bonds take in
consideration the annual inflation and the time value of money. Thats
why they are less volatile then stocks. Indeed, bonds are a powerful
tool to hedge market fluctuations
Conclusion:
As Bonds have a known and certain income flow, they are
considered as lee volatile. Over time, stocks should generate higher
revenue than bonds. However, this higher revenue will imply higher risk.
Thus, the investment in bonds or stocks depends on the time before
retirement. For a long-term strategy, stocks present more advantages,
References
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