2. Different securities make money in different ways.

Before investing, you should learn what determines a particular security's return.

The return on a security is the difference between its price over different periods of time, expressed as a percentage. In other words, to achieve a return, you need to buy low and sell high. This difference becomes your income.

    The following types of income from securities are known:

• dividends;
• change in market value;
• interest;
• discount;
• premium and margin.

They depend on the type of security.

A stock - is a security that allows you to receive a share of a company's profits, as its buyer automatically becomes a co-owner of the company. There are two ways to earn money from stocks: dividends and reselling the security at an increased market price.

Bond - Unlike a shareholder, a bondholder is not a co-owner of the company, but rather its creditor. There are two ways to receive income from bonds:

• A fixed interest rate that a company agrees to pay over the life of a bond;
• the difference between the bond's market price and par value, or the purchase and sale prices.