Question

Compare and Contrast Analyzing Equity and Fixed Income Portfolios

Answer 1

Both equity and fixed income products are financial instruments that can help investors achieve their financial goals. Equity investments generally consists of stock or stock mutual funds, while fixed income securities generally consist of corporate or government bonds

Equity and fixed income investments each reflect very different risk and return profiles. Investors who buy equities are taking on more risk because the stock market, which is where equities are traded, can be extremely volatile. Bonds, which are fixed income portfolios, provide steady but moderate returns.

Equities are normally preferred in case of long term investments, where the investments get proper time to show their results. But if the investment tenure is short, then fixed income portfolios will be preferable, as it will provide you moderate but fixed return.