Reasons To Choose Equity Investment

Stock markets and anything related to them tend to be fearsome objects for people

. This could explain the wariness of investors where equity investment is concerned. But the fact is that there are some decided advantages of putting your money into equity financing instead of letting it snooze away in a savings bank account or a fixed deposit. This is because, your money would not simply be gathering interest; it would be effectively growing with your investment. The company you have invested grows with time, and with it grows your dividend. The dividend, of course, depends on the growth of the company and the company decides how much the dividend is to be. Another thing you must consider is that the company may very well decide to give further stock to its investors. This is stock that you could either keep or sell off. As this Rights Issue is generally priced below what is the market value, you could easily acquire it for less and sell it for more.

A company might also decide to give away some of its shares for free called the Bonus Issue to the shareholders. But this is only when the company might have large reserves. Generally, the very announcement of a Bonus Issue can contribute to rise in share value. If you use it wisely, it could prove to be quite a profit for you. Such bonuses that the company doles out now and again could prove to be lucrative to you. The fact that your investments are highly liquid is another thing you might want to consider as a benefit, especially when you compare it to investments like real estate. Most of your investments would likely give you high returns in the long run, which is what you need to consider. You can also get your investments tailored to suit your own needs, depending on whether it is income or growth that you are looking for.

You need to understand that markets might fluctuate, but companies tend to grow and this ensures that their share value increases over time. But that doesnt mean that you can blindly invest in any portfolio placed before you. You need to look into the background, do a thorough check of the shares and their value and make sure that it is a sound investment for you. A good deal of the time, it is shoddy research that makes investors lose money. If youre not sure, then opt for equity investment banking services. Theyll guide you as to where you can invest.

by: sophia

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