Topic 6

The sixth main real-life topic is stocks and bonds.

    

    Before I took macroeconomics, the topic of stocks and bonds was one that I always thought about and found very interesting. After taking the course, I am very clear on the two, what they have to offer, and how they differ from one another. The two are examples of financial instruments and ways to invest personally or for a firm. 

    

    First of all, we have stocks. The people who buy stocks are called shareholders. Stocks have two types of returns: 1) capital gains and 2) dividends loss. Capital gains occur when a shareholder sells a stock at a higher price than they bought their stock. They are making money, hence the word gains. Dividends loss occur when a shareholder sells a stock at a lower price than they bought their stock. They are losing money, hence the word loss. The main caution about stocks are that they are risky - much risker than bonds. 

    The stock in Zoom was booming during the beginning of the outbreak of COVID-19, because everyone had to work from home. Zoom stock then fell when hackers began to access private meetings. 

    Next, we have bonds. With bonds, there are many less uncertainties. Bonds are a promissory note, which means they promise certain amounts to its holders. This functions exactly like an I.O.U. 

    The way this relates to me is because I am interning with a company this summer and I will be focusing on credit research and municipal bonds. Municipal bonds differ from general bonds in that they are issued by a city, town, or state, in an attempt to fund a public project. I love learning about the different types of bonds, as the topic will be very relevant for the work I will be doing when I intern.