Investment & Finance

What is a Share:  Let's talk about the Stock Market or Share Market. So what is this "Share" in the market? As per definition, "Units of equity ownership in a corporation are shares." Let's simplify. Suppose there is a company A. A has a sum of 100 shares. Now all of the shares are initially owned by the founder. With time, the founder wants to raise a fund of x amount. In return of the amount the founder will offer some portion of the company. This portion of the company is the share of the company the founder is offering the buyer in return for money. The person or group offering money in exchange for shares is called the investor. So now the investor owns a percentage of the company A with the founder. Thus, investors own the units of equity in company A. But why will someone give money in exchange for some portion of the corporation? Well, with shares in a growing company, you can easily grow your money. Not just growing money, this can also help...

  Stock Exchange: As the name implies, a stock exchange is a centralized place where the exchange of stocks takes place. The stock exchange does not own any shares but acts as a place or market for buyers and sellers to connect. Thus, the exchange, i.e., the buying and selling of stocks, occurs on a stock exchange. The New York Stock Exchange, NASDAQ, London Stock Exchange Group, the United Kingdom, and Italy are among the world's largest stock exchanges. What is the difference between the Stock market and the stock exchange? A stock exchange is a place where the exchange of stocks takes place. A stock market is an umbrella where all the stocks, shares, bonds, etc. are kept.     Who sells the stocks? or From whom should I buy or sell stocks?     The stock exchange is not like a shop where you can buy a particular stock. Rather, the stocks are traded through registered brokers. Let's take an example. Assume company A has launched its ini...

  What are mutual funds?   Mutual funds refer to a company that pools funds from investors and invests them in securities such as bonds, stocks, and short-term debt. The merged mutual fund holdings are typically known as its portfolio. Any investor can buy shares in mutual funds. And each share depicts an investor’s part of fund ownership and the income it generates.   Why do people prefer mutual funds for investment?   Mutual funds is one of the most popular choices among investors because they offer multiple helpful features, some of which are described below:   ●       Professional Management: Mutual fund managers generally research for you before investment. They select the most valuable securities and monitor their performance. ●       Diversification : Mutual funds typically invest in a wide range of industries and companies, which helps to lower the risk if any company fails. ●  ...

  What is meant by investment planning?   Investment planning refers to the process of associating financial goals and functioning them through building an effective plan. It is known as the primary component of financial planning. However, investment planning mainly starts with the identification of objectives and goals. Then the investment planner matches the selected goals with the available financial resources. These days various resources are available for investment, such as equities, bonds, cash, property, etc. So, according to your funds, you can invest in any of these resources that are most beneficial to obtain your goals and objectives.   Main objectives of investment planning   ●       Safety : The financial safety of the family is the main objective of investment planning. However, you should always invest in secure investment vehicles. ●       Income : Higher income is another objective of ...

  Systematic Investment Plan (SIP)   A Systematic Investment Plan, generally known as SIP, is a financial facility proposed by mutual funds to investors to invest in a disciplined way. SIP facilities allow investors to invest a set amount of money at pre-defined gaps in the selected fund strategy. The fixed amount of money to invest can be as low as Rs. 500 and more, while the pre-defined intervals for SIP can be on weekly, monthly, semi-annually, or annual basis. With the SIP route to investments, an investor can invest in a time-bound form without stressing about the market dynamics. Plus, it stands to help in the long term due to reasonable cost and the power of compounding. However, there are different kinds of investments, such as one-time or monthly investments, so let's discuss them in detail.   Meaning Of A One-Time Investment Plan   A one-time investment program is an investment where a fixed or lumpsum amount is invested in a particular plan for a spe...

Rule no. 1 for personal finance:        Start saving This is a simple and old lesson, but it is still relevant today. Doesn't matter how much money or wealth you have in investments or assets but you should have enough amount of money which can help you in tough times. It sounds basic but can be hard for many people. especially for the younger generation. Imagine you are newly employed. You are getting your pay. You can enjoy all the things you dreamed of. Saving doesn't sound cool, as you are young. And that's where the problem starts. not because you are young. Some people just don't save. Not just that, they don't invest; rather, they spend all the money they have. This can be cool for the present, as you have a house to live in. Your parents might still pay for your basic needs or for expensive purchases. But once that's over and you age, real-world problems start. So, how much should you put aside or invest? More to come shortly... Rule of thumb: ...

  Concept of Investment Management   Investment management is an essential factor for businesses and individuals. Its concept mainly refers to handling financial assets and all investments that are included in any financial activity. Management includes creating a short-term or long-term strategy for gaining and disposing portfolio holdings. In addition, this management also includes budgeting, banking, and tax services and duties. Thus, it is also known as portfolio management, money management, or wealth management. Furthermore, investment management helps individuals to protect their hard-earned earnings from being eroded with time due to amenity uses. It also helps increase money over a certain period to meet the financial needs of individuals. The term often refers to addressing the holdings within a specific investment portfolio and trading them expertly to achieve the investment objective.   Basics of Investment Management   ●    ...