Thread by @FinPlanKaluAja1

1. Stocks pay a Dividend
2. Bonds pay a Coupon
3. Bank deposit earn interest

Above are generally income earning assets

4. Currency pay nothing
5. Bitcoin pay nothing
6. Commodities pay nothing

4 -6 need trading volatility to make a profit.

All are buy low, sell high

If Stock pays dividend, then compare dividend yield of stock to Yield to Maturity of bBond and/or bank deposit

Yield = Dividend /Cost price

Eg Zenith bank plc market price of N20. Dividend of N2

Yield = 2/20 *100 thus 10%

You compare 10% to what your bank pays as interest

With Bond, IGNORE coupon on bond.

Used coupon however to calculate Yield to Maturity of Bond, then compare to yield of Stock

Bond Yield = Coupon paid/Cost price

e.g. FGN bond costs N1000 pays N50 p.a. thus 50/1000 or 5%

ignore prices, focus on cash yield PAID....

For Commodity, also calculate yield

Initial cost to buy bitcoin N1000
Selling price N1200
Gain N200

Yield = Gain/Initial Cost or 200/1000 or 20.

This is how you compare Stocks to Bonds to Bitcoins

YIELD not cash gain or profit.