Learning about Investing, Stocks and Bonds

Here is a simulation site where you can learn all about that kinda ish.... 



www.tradeo.com/

I am just beginning to get into that kinda ish myself.
Hopefully, we can learn together. 

Yes, that is exactly what the website does. 

A stock is a an equity share in a company, giving the buyer a claim on a portion of the firm's future earnings. A bond is a piece of corporate debt (basically, a tradeable loan), which will have a fixed lifetime (its "maturity"), will have regular interest payments ("coupons"), and must be repaid by the company at full value when the maturity is due. There are lots of more complex variations on these financial instruments, but these are the two main types to understand.

If you're serious about getting into investing, I strongly suggest getting a good book on corporate finance (e.g. "Principles of Corporate Finance" by Brealey and Myers, or "Corporate Finance" by David Hillier). It won't be the most exciting material in the world (at least not for most people), but it will help you make a lot more sense of financial news and reports, which is essential if you want to understand the significance of events for your investments.

Not quite; both stocks and bonds can fluctuate in value, and bonds can change in price even more drastically than the highest quality "blue chip" stocks - look up "junk bonds"; you have to look in detail at the particular stocks and bonds and the financial conditions of their issuers. What is true in general is that with stocks you have a potentially unlimited upside, while with bonds you trade that upside potential for supposedly greater security of your investment - this is the risk/return trade-off that is fundamental to corporate finance. However, the financial conditions of bond issuers (both corporations and governments) can deteriorate in unexpected ways, so it isn't always safe to simply buy some bonds and think you're covered, either: imagine voters electing a leftist leader like in Argentina, who refuses to service the country's debts).

It's to monitor the condition of bond issuers that ratings agencies like Standard and Poors, Moodys and Fitch exist; any changes they make in a bond issuer's credit rating will be reflected in the market price of the bond, with a negative rating lowering the price below par (and, as the interest rate on the bond is fixed, thereby increasing the yield). A downgrade from, say, AAB to ABB might lower the market price of a bond with a 6% yield from $100 to $95, increasing the yield to 6.3%. More drastic changes are possible; for example, if a government announces its intention to default, or a company is slapped with a gigantic fine that is many times its annual profits, its bonds could dive in price to as little as $0.20 on the dollar (i.e. 20% of face value). With such bonds, there is a very high probability that the issuers will never repay, which is what the market is pricing into their yields.

It's entirely up to you which textbook you prefer - I just picket two titles that seemed to have decent content - but I do urge you to get (or borrow) one of your preference and work through it. As I said, this isn't the most exciting material, but I wouldn't advise anyone to get into investing without knowing the things one would learn in any decent corp-fin course.