If dividends are paid, they go to common shareholders. The price of common stock generally reflects the perceptions of investors, in that it goes up if the company's prospects appear good or down if not. There are hundreds of factors affecting the price of stocks, and hundreds of theories about valuation of stocks. The other thing is that no matter how robust the economy, there are companies which either fall behind in technology or otherwise become inefficient or unprofitable, and stocks of those companies will go down.
Bonds are loans to the issuer.
They provide interest income for a specific time, and return of principal at the end of that time, when they mature. Prices of bonds also fluctuate. Treasury bond prices change according to interest rate moves, and prices of other bonds issued by corporations, etc., change not only in response to interest rate changes but also to preceptions of the ability of the issuer to pay interest and principal when due. In general, bond prices will rise when interest rates decline, and vice versa. This provides a way to capitalize on interest rate movement with bonds, making them good for more than just paying interest.