Security
Security - is a special commodity, traded on his peculiar securities market. This product has no money or real customer value and, therefore, is neither a service nor a physical commodity.
Each valuable paper, or rather their market form and economic substance, can be viewed simultaneously from several points of view. This is predetermined to classify securities according to various criteria. Each security has its own unique characteristics, which allow you to effectively build portfolios and investment strategies to adhere properly. It is generally considered the following types of securities: equity and debt.
In this chapter we will discuss the main representatives of the equity securities. Fractional security determines the investor's share of certain capital, enterprise, project, etc. Equity is the equity securities.
The campaign - a representative of the types of securities by means of which the holder (called a shareholder) receives a share in the company (issuer) and becomes its "co-owner." Shares may give the right to receive income from dividends and participation in company management. When you buy shares in the investor entered into the register of shareholders. I should say that by buying the shares, the investor puts his capital some risk because if the company suddenly things go wrong, then the share price decline, which could lead to loss of all money invested in whole or in part.
As part of our consideration of types of securities, all of the shares represent ownership of the issuer, and each share represents an equal part of this share. Shares are divided into two types: ordinary shares and preference shares.
Ordinary shares (the owners) are eligible to vote, which may be used at the meeting. But they have a lower priority in receiving dividends than preferred shares. In addition, the shareholders' meeting (or on the board of directors) may decide to send profits to expand production, resulting in the holders of ordinary shares will receive dividends at all. To take such a decision - the legal right to the company. Despite this, the ordinary shares have been and remain extremely popular method of allocation of investment, it uses a lot of financial institutions and millions of private investors.
Preferred Shares (the owners) do not have the right to vote, but, as mentioned above - they get preferential right to dividends. If the Company has paid no dividends, it was already the owners of preferred shares are entitled to vote. As a rule, the amount of dividend payments on preferred shares with less than ordinary shares, and they cost less. All of their attractiveness for investment lies in the regular dividend. By investing in these stocks often resorted those who are interested more in providing a sufficient level of current income than maximizing profits.
Outstanding shares on the stock exchange is beneficial to all - and the companies-issuers and the investors who bought shares. Shareholders invest and receive income in the form of dividends and in the form of increased stock value. In turn, issuers receive additional funds that can invest in the implementation of internal projects. You do not need to worry about interest payments.
Thus, the action - a security which makes it an investor who bought the shareholder (and therefore the owner of the shares in the company) and allows you to make a profit. But the profits can be as big and not be at all, because the market value (rate) of the shares is constantly fluctuating. If the company is experiencing rapid growth, the investor can sell the stock more and get significant profit. Well, in a crisis situation the stock price falls, the investor will receive a loss. Therefore, the interest of most investors confined to stocks of large and stable companies, which tend to increase.
