Investors who want the least risk may choose U.S. government bonds that are backed by the federal government, or municipal bonds that are also secure and often offer tax-free interest. Before investing in bonds, ask questions regarding holding the bond to maturity date and what your loss may be if you decide to sell before that date. Investing in the stock market offers more options but also can be subject to a high degree of risk. The investor is an owner of the firm he or she buys into and therefore shares the profits of that company. The average annual return on stocks since 1925 is 10 percent, which exceeds the return of most preferred investments.
Bulls consistently buy, anticipating an increase in stock prices.
Bears believe stock prices will fall, and when the market continues to decline it is referred to as the bear market. There are several different stock opportunities that an individual should be cognizant of when investing in the stock market. They are considered risky but have the potential for high yields. Income stocks offer investors a rather high dividend yield on their investment. Public utilities are considered good income stock.