There are many ways to invest your money: in a bank or building society, in property, in Equities compared to bonds or in equities – these are just a few of the options other types of Cash savings are perceived to be the safest way to invest but returns are not high investment Bonds are like a fixed-term loan to a company – they offer the potential for a regular income and tend to be lower risk than property and equities Bonds can give you a regular income through interest payments Equities are higher risk than cash savings or bonds but also offer the most potential for strong growth Differences between equities and bonds Choosing between equities and bonds depends on the level of risk you’re willing to take and whether you want a regular income or you want your initial investment to grow. Equities represent a share in a company’s assets. While equities can enjoy higher returns in the longer term than fixed income securities – also known as bonds – they can also pose greater risk to your capital. Equities could be right for you if you are comfortable with taking a risk and are willing to have a variable income from your dividends or distributions. Bonds are debt instruments and can be particularly attractive if you’re looking for regular income. They are generally seen as a more secure investment when compared with equities because there is an obligation to pay the bond holder back. Income from bonds is usually fixed and the price of bonds tends to be less volatile. Bonds could be right for you if you are less willing to take a risk and want a regular income for a given period of time. A diversified portfolio made up of both bonds and equities could give you more stability as the market rises and falls. 6