Debentures Vs. Stocks And Bonds

A debenture is an unsecured loan you offer to a company. The company does not give any collateral for the debenture, but pays a higher rate of interest to its creditors. In case of bankruptcy or financial difficulties, the debenture holders are paid later than bondholders. Debentures are different from stocks and bonds, although all three are types of investment. Let us discuss about different types of investment options for small investors and entrepreneurs.

Debentures vs. Stocks:
When you buy stocks, you become one of the owners of the company. Your fortunes rise and fall with that of the company. If the stocks of the company soar in value, your investment pays off high dividends, but if the stocks decrease in value, the investments are low paying. Higher the risk you take, higher the rewards you get.

Stocks

Fashion Survey Survey Info Plus Gifts Survey Today Survey Daily Survey Review Survey Survey Station Survey Center Refurbish Survey Top List Survey Trends Survey Newest Survey Produvt Survey New Items Studio Hotlist Center Newest Center Products Center Shop Center Trends Center Reviews Center Gift Center Direct Info Plus Tools Plus Search Station Review Estimate Estimate Search Estimate Ideas Ideas Premium Green Stuido Daily Resale Review Studio Gift Resale Store Direct Station Today Station Daily Studio New York Plus

Debentures are more secure than stocks, in the sense that you are guaranteed payments with high interest rates. You are paid an interest on the money you lend the company until the maturity period, after which whatever you invested in the company is paid back to you. The interest is the profit you make from debentures. While stocks are for those who like playing the field, and are willing to take risks for the sake of high returns, debentures are for people who want a safe and secure income.

Debentures Vs. Stocks And Bonds

Debentures vs. Bonds:
Debentures and bonds are similar except for one difference - bonds are more secure than debentures. In case of both, you are paid a guaranteed interest that does not change in value irrespective of the fortunes of the company. However, bonds are more secure than debentures, but carry a lower interest rate. The company provides collateral for the loan. Moreover, in case of liquidation, bondholders will be paid off before debenture holders.

A debenture is more secure than a stock, but not as secure as a bond. In case of bankruptcy, you have no collateral you can claim from the company. To compensate for this, companies pay higher interest rates to debenture holders.

All investment, including stocks bonds or debentures carry an element of risk. If you are unsure of the investment options that are best for your business, then you can consult a small business consultant who will guide you to the best investment options available to you. Investing wisely today can pay heavy dividends tomorrow.

Debentures Vs. Stocks And Bonds

Alexander Gordon is a writer for http://www.smallbusinessconsulting.com - The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at .95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.

Business Owners all across the country are joining "The Community of Small Business Owners” to receive and provide strategies, insight, tips, support and more on starting, managing, growing, and selling their businesses. As a member, you will have access to true Millionaire Business Owners who will provide strategies and tips from their real-life experiences.

cell phone watches Buy Best Cycle Country Boomless Spray Boom Cheap Maxell Cleaning Tape Sdlt 1 S4 Buy Best Pelco Eh2508 1 Enclosure Dust Tight