Why are bonds safer than shares? Think about it this way. When you buy a home, you might get a loan for 80 per cent and fund the rest with your deposit. The loan is the same as a bond while your deposit is equity (or like shares).
If you default, the bank gets to foreclose and recover its loan by selling your home before you get anything back. If your home falls in value, your deposit (or ''equity'') may be worth nothing. When you invest in a bank bond, you are lending money to the bank. In contrast, investing in bank shares leaves you with all the downside risk. There are smarter solutions out there for you. Start by becoming informed, and always get advice before you act.
