Is equity riskier than bonds as an investment option?

Please invest smartly with SIP. ( Systematic Investment plan)

Sailesh I am with you.

Investment should be according to our need. I would prefer Stock over bond. Investment in bond means losing our money as the interest gained by investment in these instruments not even surpasses the inflation rate in the market. However, it's true that risk associated in stock markets is very high but the more risk you will take the more return you will gain is also true. In these times when inflation is on the hike I personally feel that investment in bonds is a total loss. These days investors are willing to bear great short term risks associated with equities as compared with bonds as they know equities will eventually outperform bonds over the long run but the risk doesn't disappear over time. A further dimension arises when the investor must balance long-term goals with short-term concerns. Greater short term risks are veiwed as the better long term returns. Equity portfolio is virtually ceertain to outperform any fixed income investment over a long enough period.

No, Equity is not riskier than bonds because as you seen the scenario of indian economy last decades the interest rate were fluctuated which directly related to bond. As you have amount of money and if you want invest for long term and relax about the remaining life you should be invest in equity because i believe that whatever fluctuations are going on market still it's give return of approx 15% to 17% so i think equity is better option for long term investment.

OFCOURSE EQUITY,since it is based on share market and there are always fluctuations in share market but in the long run there is more benefit than bonds,

if a person can take risk should opt for equity and those who are affraid of taking any risk opt bonds

People should play safe and meanwhile earn handsomely so there has to be balance between both of them. I feel to diversify portfolio in such a way that one can hedgge position over other so to gin more from equity one should invest some amount in bonds but allocation should be more toward equity as that will increase risk apetite of person, as he has already invested some amount in safe holding.

If the volatility in bonds is so high as indicated by  sumeet ,dushyant. Then F.D remains a better alternative to bonds. Also FCD of companies like Tata Capital can be taken into consideration,whose tenure of longterm time gives the holder an option and also possibility of returns on this bonds beating  the inflation while giving returns.

Economies that support investments in Bonds and stocks and all types of other assets like, precious metals, ETF's, RIET's, Mutual funds, livestock, commodities etc; are called 'asset economies'.

People in such economies do investments in such assets for imporving their future consumption needs or so to say to improve their endowments.

Bond prices and interest rates move in opposite directions because when prices come down it is highly riky to invest in bonds and when it goes up it is less risky environment to invest.

I agree. One can look into debts only when need to park money for shorter term,, else inflation is a big worry.

You have enlightened me on bonds and it,s related risk feature.Especially with economic cyles swinging so fast -inflation,hyper-inflation,deflation across the globe and continent. This risk feature of bond also must be addressed.

Thanks Dushyant.

I totally agree with u Esha ji , and a balanced approch in this regard is good, taking ito consideration the age of the invester and his risk appetite.

I shall put it in a different perspective that of Risk.

Suppose one has the opportunity of gaining 15% on an investment or getting your investment back and the second option of gaining 20% on your investment or loosing all your investment you can get. One who chooses the first option is called the 'risk averse' investor or the bond investor and the second type is called the stock investor. 

In stock investment you may not have to forfeit all your investment one might make it if one is a careful investor. Only extreme risk takers or unprecedent events knock off your investment to zero.

Dear Suchita and Jyoti, Fixed return securities viz bonds etc are more linked to risk in these volatile time where we see seesaw movements in inflation as well as in market interest rate. Returns on bond is combination of face value of security and coupon rate attached to security. When interest rate goes higher side the bond face value goes southward and vice-versa and due to this we can see negative returns in bond market also, beside this Inflation nos also play there part in bond returns and in actual terms they can hamper the positive returns of bonds and turn them to –ve (Discounting of inflation nos to bond return nos)

I agree that it totally depends upon the risk appetite of the investor. though bond has less risk compared to equity, but still equity is the best investment avenue. the chances of recovery of loss is much higher in equity than bonds. we have to be very selective while choosing both, bonds as well as equity. Equity is riskier in short term but if we are investing it for a period say 4-5 years then it is the safest bet 1 can have with a considerable return much higher than bonds.

In the current market there were few liquid funds which gave a negative return, and a loss from it has not yet required. but in equity it is recovering.

The percentage allocation of investment into equity and bond will depend on the risk appetite and age of the investor. A higher allocation of equity may be desirable for young and for higher returns in long term. A certain percentage of bond/debt instruments may help the investor in a bear phase like the one we are witnessing since 2008.

In debt market also there is a risk  but the return is limited. In the case of equity it is high risky but there is no limit for the return. If we are taking the risk we should get a reward accordingly

Equity is more risky to bond, as well as bond also more risky than equity, all its depend on Inflation and tenure of investment. 

Bonds are less risk than stocks. When you look at the risk vs return of both stocks returns more than bonds. That tells the whole story more risk you take on ste ocks more return you demand from it.

Corporate bonds yield close to 15% per annum where as equity can go 20% or above dividend yield + capital gains yield. So stocks are riskier.