Is committing money to earn a financial return the same as playing for money? It must have crossed your mind if you had committed some money every month to acquire shares of any major company during four or five years previous to filing its bankruptcy.
Having tried to take some business risks cost you an arm and a leg, but if you had given it a second thought you would have committed your money to a savings account earning a 1, 2 or 3 annual percent during that time period.
You, as an equity shareholder, are entitled to a share in the profits of the company’s business as well as any appreciation in the perceived value of the shares. When investing your money in a debt investment such as a bank deposit, bonds etc you are assured a fixed amount of interest on your investment and return of capital. This isn’t the case with an equity investment. By becoming an owner, you could suffer the risk of your company not being successful. The rewards of this risk are high.
Money originated as commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for “all debts, public and private”.
BSE reflects the movement of the share prices on the stock markets. The Sensex rises and/or falls continuously during trading hours. Rises indicate gains and falls indicate losses.
The risks and rewards of investing your money in equity are clearly apparent from the Bombay Stock Exchange Sensitive Index (BSE Sensex). True equity money is unsecured and directly reflects the faith of the investor in the business, its management and the commitment of its principals to it.
Investment opportunities are very broad and the abundant information that exists in the internet may help you get more knowledge about those investment opportunities that you feel you can carry on. Having success in investments requires knowledge about values and stocks in which one is investing as well as the risks that those values carry.
The negative part that comes along with the internet is that the use of such a simple and quick that you can make investing mistakes much more easily. Without having to talk about your investing ideas to your agent o financial broker, you could end investing in low return shares and bonds, but with a higher risk of losing it all.
Many analysts recommended the buying of shares and stocks with very little information about those values, and only because the prices had dropped to a very low level.
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