When it comes to investing in the financial market, understanding the relationship between bonds and stocks is crucial for developing a successful investment strategy. Both bonds and stocks are popular investment options, but they act differently and can impact your portfolio in different ways.\n\nFirst, let's clarify what bonds and stocks are. Bonds are debt instruments issued by governments, municipalities, or corporations to raise capital. When you buy a bond, you lend money to the issuer for a specified period of time and receive regular interest payments. At maturity, you get back the principal amount you invested.\n\nOn the other hand, stocks represent ownership in a company. When you buy stocks, you become a shareholder and have the potential to earn profits through dividends or capital appreciation. Unlike bonds, stocks do not have a maturity date.\n\nOne major difference between bonds and stocks is their risk profile. Bonds are considered relatively safer because they offer fixed income and a predictable return. However, this also means that the potential for earning higher returns is limited. Stocks, on the other hand, have higher risk and volatility but also offer the opportunity for higher returns.\n\nThe relationship between bonds and stocks is often referred to as the