The type of company and other factors, such as growth stocks, income stocks or technology classifies stocks. Stocks are purchased for different reasons. Some people buy stocks in companies that pay regular dividends so that they will receive regular income. Others prefer to buy stocks in companies that will grow and increase the value of their shares. Those who want to take a real risk can speculate by buying emerging companies that have great potential growth.
Bonds are debt obligations of a publicly owned company or a government agency.
They do not represent ownership but are obligations to repay a loan over some time period with a set interest payment. As a bondholder, the company or agency is obligated to pay its debt to you prior to paying dividends to the stockholders. Bonds are sold with a face value and a specific rate of return. The value of the bond may change over the length of the term, based on how much people want to buy or sell that particular bond. Each bond has a current market price and a set interest rate.