Shagun Finance
Why Investment
Investment is the means of providing for dreams and plans for the future –buying a home, sending your children to college, taking a special vacation or funding for special events such as weddings. For most people, it is the safest, most convenient, and most effective way to build wealth. Investors build wealth in order to achieve financial goals- goals that cannot be met by a pay cheque. It requires discipline and effort, but the rewards of investing can be extraordinary. What is investing? Investing is committing your funds to one or more assets that will be held over some future time period. It is putting your money to work for you. When you invest your money in a stock, bond, or mutual fund, you do so because you think its value will appreciate over time. The funds that you invest come from liquidating assets already owned by you, or from borrowing money, or from savings (foregone consumption). By foregoing consumption today and investing the savings, we expect to enhance our future consumption possibilities. Anticipated future consumption may be by other family members (such as education for your children) or by yourselves (possibly when you retire when you would be less able to work and produce for your daily needs). There are a number of assets in which investment can be made:
Investment is the means of providing for dreams and plans for the future –buying a home, sending your children to college, taking a special vacation or funding for special events such as weddings. For most people, it is the safest, most convenient, and most effective way to build wealth. Investors build wealth in order to achieve financial goals- goals that cannot be met by a pay cheque. It requires discipline and effort, but the rewards of investing can be extraordinary. What is investing? Investing is committing your funds to one or more assets that will be held over some future time period. It is putting your money to work for you. When you invest your money in a stock, bond, or mutual fund, you do so because you think its value will appreciate over time. The funds that you invest come from liquidating assets already owned by you, or from borrowing money, or from savings (foregone consumption). By foregoing consumption today and investing the savings, we expect to enhance our future consumption possibilities. Anticipated future consumption may be by other family members (such as education for your children) or by yourselves (possibly when you retire when you would be less able to work and produce for your daily needs). There are a number of assets in which investment can be made:
Way Of Investment
There are many Instrument in Finance World Your time value is very important
Bonds
Grouped under the general category called fixed-income securities, the term bond is commonly used to refer to any securities that are founded on debt. When you purchase a bond, you are lending out your money to a company or government. In return, they agree to give you interest on your money and eventually pay you back the amount you lent out.
Stocks
When you purchase stocks, or equities, as your advisor might put it, you become a part owner of the business. This entitles you to vote at the shareholders' meeting and allows you to receive any profits that the company allocates to its owners. These profits are referred to as dividends.
Mutual Funds
A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your money with a number of other investors, which enables you (as part of a group) to pay a professional manager to select specific securities for you. Mutual funds are all set up with a specific strategy in mind, and their distinct focus can be nearly anything: large stocks, small stocks, bonds from governments, bonds from companies, stocks and bonds, stocks in certain industries,
Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc.
So, you now know about the two basic securities: equity and debt, better known as stocks and bonds. While many (if not most) investments fall into one of these two categories, there are numerous alternative vehicles, which represent the most complicated types of securities and investing strategies
Qualities of a Smart Investor
Smart investors have a plan for investing, and they stick to it: It is very easy to be tempted by a tip about a hot stock that is reported in all the financial papers. But this is not the way that smart investors make money. They look at their goals, time frame and knowledge of the markets to chart a plan that suits their needs
1 Smart investors invest consistently: To succeed year after year, they know that they must keep their money constantly growing.
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