The Best Form Of Equity

Stocks-Mutual-Funds There are two popular modes of equity investments, one is mutual funds and another is share trading. Both the options are subject to risk factors and the returns achieved are subject to the performance of underlying stock markets. A share is partial ownership or equity in a .pany. Purchase of stocks in a .pany makes a person a shareholder of the .pany. There are two types of stocks: .mon and preference. If you are a shareholder of .mon stocks, you are entitled to vote in for the directors of a .pany, and entitled to receive dividends on your shares (if the .pany pays dividends). If you are a shareholder of preferred stocks, usually you do not have voting rights, but you receive a fixed dividend and are paid before .mon shareholders. There are two ways of share trading, 1) applying for the equity shares of the .pany through Initial Public Offerings and 2) buying the shares from exchange platform through a broker. Only equity shares are listed on stock exchanges. Preference shares are generally not listed on the stock exchanges. Mutual fund investment is a professionally managed pool of money from investors with similar investment objectives. A mutual fund represents many individual stocks from a variety of industries and is managed by a fund manager. Mutual funds offer diversification and professional management of the investors money. There are two ways of mutual fund investments 1) While buying units from the New Funds Offerings and 2) buying from the existing funds on its price based on its Net Asset Value (NAVs). The NAV is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. The NAVs are declared on daily basis. The units can be bought or sold on present NAVs during 11 am to 3 pm during the stock market trading days at the offices of funds offices, brokers, etc. Mutual fund investment involves Systemic In.e Plan (SIP) it involves investment of a fixed sum of money into a specific investment scheme, for a pre-determined number of months. The minimum amount can be as small as Rs.500 and the frequency of investment is usually monthly or quarterly. The power of .pounding can do wonders. In due course of time, a small amount can grow into a significant amount. More importantly, an SIP does away with the need or effort to time the market. And this is where SIP fits in. By the process of regular investing one gets to invest in the highs as well as the lows, and this helps in averaging out the volatility in the market. About the Author: 相关的主题文章: