InsiderFlow › Comparisons › Stocks vs bonds

Stocks vs bonds

Ownership versus lending: every portfolio's two fundamental asset classes, compared on return, risk and role.

Criterion	Stocks	Bonds
What you own	A share of the company: profits and growth	A credit: periodic coupons and capital at maturity
Historical return	6–8% real per year over long horizons (global equities)	1–3% real per year, more stable
Risk	Sharp swings: 30–50% declines every cycle	Contained if held to maturity; rate and credit risk
Income	Variable dividends, never guaranteed	Fixed, predictable coupons
Inflation protection	Good over the long run	Weak at fixed rate (inflation-linked bonds exist)
Portfolio role	The growth engine	The swing stabilizer

The verdict

It's not a contest: they're complementary. The practical rule ties your equity share to your horizon — the further the goal, the more stocks you can afford. The classic 60/40 remains the starting point for balanced portfolios; younger investors can push toward 80/20 or 90/10, those near their goal go the other way.

Frequently asked questions

Are bonds always safe?

No: 2022 was the reminder, with double-digit losses on long bonds as rates rose. True safety only when held to maturity with solid issuers.

What do big funds buy?

Both, in proportions that shift with the cycle: 13Fs show the equity side of their choices, trackable on InsiderFlow.