How risky are stocks compared to bonds?  Lets find out.

Bonds
A bond is simply a loan, but in the form of a security, although terminology used is rather different. The issuer is equivalent to the borrower, the bond holder to the lender, and the coupon to the interest. Lets say as of Thursday's close, a 10 yr bond was priced to yield 4.07%. If you hold it for 10 years, that's your guaranteed return every year, locked in the day you bought it. It will not increase or decrease. At the end of the 10 years, you get your initial investment back, plus the interest guaranteed.

Stocks
A Stock is an instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. Stocks can yield higher return than bonds but they are more volatile as well. Some stocks and their return over a certain period is given below.
 

However, some companies have gone completely bankrupt and investor lost all their investment. Some of those companies are Delta Airlines and Enron.

Mutual Funds
A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. On average, mutual funds offer less returns than some of the stocks but more than bonds. However mutual funds are less volatile than stocks but they are still more volatile than bonds. Some mutual funds have been known to yield about 10% a year on average for past 20 years.

My suggesstion
I suggest to create a diverse portfolio consisting of mutual funds, some bonds and stocks of fortune 500 companies. However most of your money should still be invested in mutual funds.

This article provides an unprofessional advise. The returns are approximate to a whole number. Returns are not guaranteed to continue a trend in future. The author of this article does not hold any liability resulting from the information obtained from this article.