Don't keep fretting if you don't understand stocks and bonds. There are many places on the Web that explain these basic investments, and how to begin to venture into them as the economy improves.
DEFINITIONS
Finweb.com, a repository of articles on personal finance, describes stocks and bonds as "basic staples of both small and large investors the world over." This page gives some simple definitions: "A stock certificate gets you partial ownership in a company and provides a return on the price you paid for it -- hopefully. A bond is simply a loan you make to an entity, and it will also give you a return on your money."
http://go.philly.com/stockbond1
RISK FACTORS
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"Understanding Stocks, Bonds, and Investing in Financial Markets" is a chapter from a book, "What Women Need to Know About Retirement," and is provided online by the WiserWomen.org site. Besides defining terms that most of us hear all the time -- such as bulls and bears, blue chips, Nasdaq, and Dow -- the chapter delves into the benefits and risks of buying, holding, and trading stocks and bonds. As many investors found during the recent collapse, the principal risk of bonds is "the possibility that financial trouble could make the bond's issuer unable to pay the interest or even give you back your principal as originally agreed. The issuer may even declare bankruptcy."
http://go.philly.com/stockbond2
FUNDAMENTAL NOTIONS
The Stocks&Bonds Guide site is a blog with entries sorted into categories that include stock analysis, bond advice, and general market guidance for beginners.
ASSET ALLOCATION
Why would a street vendor sell sunglasses and umbrellas? Because people are likely to want either one or the other. That is diversification, instructs this "Beginners' Guide to Asset Allocation, Diversification, and Rebalancing" from the federal Securities and Exchange Commission. Diversifying your investments protects against losses in any one category. The text adds cash to stocks and bonds as a third major asset category for investors.
