Financial managers raise financial capital in stock markets or bond markets as the main goal of their responsibilities to their accounts, customers, or companies. They handle the financial wealth of every person that they invest a dollar for, investments in the stock market are the buying of a percentage of a share in a company, (Duff). In comparison investing in a bond is considered a loan on behalf of the investor to the company issuing the bond, (Duff).
Under the website, thenest.com, Victoria Duff addresses stock and bond investments as a confusing decision as each has an interrelationship. Interest rates impact the decisions of financial managers as the supply and demand of the market will change with the rise and decline of the rates. Low-interest rates companies see an increase in the purchase of stocks as companies are improving their profits. On the flipside as rates increase with interest, we will see an increase in the interest of bond options. Duff explains “the bond markets rallies because of a flight to quality in which investors buy a bond to safeguard their principal.” Balancing of the risk of the markets is a talent of those in a financial management role as changes in needs of those that they are investing for change continuously as multiple other external factors are…show more content… The American Funds, (American Funds from Capital Group), provides a summary of the pros and cons of each option. Stocks can have a potential for greater returns than other long-term investments as well as provide dividend payments to assist in covering during a time of lower stock prices. Dividends can be turned over to purchase additional shares to continue to increase the percentage of ownership in the investment. Bonds, on the other hand, have less dramatic highs and lows than investment in stocks. Bonds provide investors with greater stability and a reduced risk in the funds