Grow Your Money by Investing in Equities
Today people are looking for a better option to invest in something. Though many investment options are available, investing in equities is more profitable. However, it is important to know the method and techniques involved in investing in equities. It will help you grow your money and gain more profit. Here, lets us see how to invest in equities.
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What is equity investment?
It is the money invested in buying shares of a company in stock markets. The equity shares are traded on a stock exchange, and the investors enjoy the monetary difference if they trade the shares for a profit.
Why should I invest in equities?
Equity investments work on speculations. Investors who buy the shares expect that the share value will increase in the form of capital gains and capital dividends. In case, the share value increases, the investors will get monetary benefits if they sell the shares.
The equities signify the stocks of a company measured in quantity of shares. If you purchase a company’s stock, you are considered a part of the company’s ownership holders or the company shareholder. Equities can boost a portfolio’s asset allocation by adding diversification.
The stock exchange in Singapore is called the Singapore Exchange (SGX). The benchmark for the Singapore market is the Straits Times Index (STI), which marks the operation of the top 30 companies listed on the SGX. The number of equities an investor buys or sell is restricted and differs from market to market. In Singapore, the minimum number of shares an investor should buy or sell is 100 shares, while in other markets it starts from a single share.
Some benefits of investing in Equity Shares
If the company performs well, the value of shares increases above its purchase, and the investor can enjoy capital appreciation. For instance, if an equity share is purchased at $2.00 and sold for $ 2.50, there is a capital appreciation, and the investor gains returns. The investors can receive the dividend either in cash or as additional stock.
Experienced investors grow their money using their financial planning and investing knowledge in equity. You can find several options to invest in equities like mutual funds, ELSS, or direct investment in stocks. Some of the benefits of investing in equity that you should know about are:
Higher Returns
More and more people are investing in shares to get high returns. It is the most significant advantage of equity investment. Equity investment gives high returns in a short time, unlike the other investment options like FDs.
Ownership
Investing in equities means the shareholder becomes a member of the company. In short, shareholders gain ownership of the company and have rights in the company. They can enjoy a share of the income gained by the company. Moreover, they also have the right to vote in the company. By being the equity shareholder, the investor can enjoy other benefits such as:
- Dividend
- Limited liability
- Liquidity
- Protection by SEBI
- Right shares and bonus shares
- Flexibility
- Tax advantage
- Collateral against loans
- Diversified investments
Investing in equities involves risks, and investors should understand the risks and know how to balance them. However, the asset class offers good potential for increasing returns. Apart from the investment risks, multiple factors may affect the investments.
If you want to invest in shares, study the market continuously or seek expert advice to reduce the market risks.
The gains of investing in equities have great potential to make returns. Nevertheless, the investor must invest smartly. Reducing risks and earning a return is the long-term game.
