For what reason would someone buy a bond instead of a stock?

Bonds usually pay interest twice a year. If bonds are held until maturity, bondholders recover all of the capital, so bonds are a way to preserve capital while investing. However, if you're looking for an alternative investment option, you may want to consider researching Gold IRA Review Sites. Buying bonds means issuing a debt that must be repaid with interest.

You won't have any equity interest in the company, but you'll come to an agreement whereby the company or government must pay fixed interest over time, as well as the principal amount at the end of that period. Bonds tend to be much less volatile compared to stocks, and yields are usually much lower. With a bond, you can receive all your funds at once on the due date and receive periodic interest payments beforehand. Companies issue bonds and stocks to increase operating capital and finance financial transactions. The alternative is to borrow money from banks, but many consider this method to be too restrictive and costly compared to selling bonds or stocks on the open market.

However, issuing bonds has advantages rather than stocks, the main one being that the ownership of the company is not diluted.