Comparing stocks and government bonds, which has more risk? Which pays a higher average return? Why?
Jeff is right stocks have more risk but right now government bonds are more likely to loose money. when interest rates rise sooner or later the value of government bonds will fall. people will not want to own government bonds that pay so little and sell them to buy new bonds that pay more.
this will drive prices of government bonds down and price of mutual funds that invest in them will suffer. i would invest in dividend aristocrats instead of bonds. you make more money with them and they have increased their dividend payments for years. most dividend aristocrats stocks move slower than regular stocks. when market crashed they went down less butt they also move up slower but your paid to wait.
stocks will pay a higher average return than bonds because interest rates can not go much lower.