Stocks are shares of ownership in a company. Companies do this to raise money that will translate into growth. The growth of the company will affect the amount of money you invested in the company. You can buy 100 shares of stock in that company. That's a 20 percent return in one day compared to a bond's sluggish 7 percent return each year.
Risk is a factor that plays a big role.
If you're a low risk taker that needs the money in 1 year, a bond or CD is the best choice. Stocks are also a good way to invest if you don't need the money for another five years. History has shown that financial markets recover. And the longer you keep your money in the stock market the better it will grow to achieve your goal. Remember that the biggest risk is not taking one at all.