According to investment principles, what is one major advantage of equity securities over bonds?

One major advantage of equity securities over bonds is their higher potential for growth. Equity securities, which represent ownership in a company, typically have the ability to appreciate significantly over time, especially if the company experiences strong growth and profitability. This appreciation in value, coupled with the possibility of receiving dividends, means that investors in equity securities can achieve substantial returns.

In contrast, bonds generally provide fixed interest payments over time and return the principal at maturity, which limits their growth potential. While they can be considered less risky with more stable returns, they do not offer the same level of appreciation that equities can. Investors seeking long-term capital appreciation often favor equity securities for this reason, as they tend to outperform bonds in terms of growth potential over extended periods.