What is the difference between fixed-income and equity investments?

Fixed-income investments, such as bonds, provide a predetermined return in the form of regular interest payments and return of principal at maturity. They are typically considered safer than equity investments because they offer more predictable returns and are less volatile. Equity investments, such as stocks, represent ownership in a company, and their value fluctuates based on the company’s performance and market conditions. While equity investments carry higher risk, they offer greater potential for capital appreciation and dividends. Fixed-income investments are often favored by conservative investors seeking stable income, while equities are preferred by those looking for higher growth potential.