Briefly about the shares and their attractiveness to investors

Let's look at an example of what constitutes shares, for this we consider a hypothetical company "Horns and Hoofs." It develops rapidly, and needs to raise additional funds in the form of indefinite loan to continue to grow. In order to attract capital and avoid the possibility of getting bogged down in debt, the company decided to conduct a public offering of shares on the stock exchange (IPO, Initial Public Offering). Thus, formally, it would sell part of the "self", because the shares are entitled to the relevant part of the assets of the company that issued the shares. The owners of the shares are called shareholders, and in fact - co-owners of the company.

Who and how to buy stocks? Of course, investors. The same as we do. People who are willing to invest part of their income in a rapidly growing company. We do this to make our money "work" instead of lying idle, while they were working to maximum efficiency.

Here we found a good, stable, strong business that regularly show positive financial results: sales, sales, profits, and so on. The company we liked, and we wanted to take part in its development, investing money through the purchase of shares, acquiring, thus, in the company's share. If the company will meet our expectations and indeed continue to evolve, bringing a decent profit, then at the same time will increase and the capitalization of the company, as well as to increase the stock price.

What determines the price of the shares? The answer may seem simple. Take the value of the company (which can be found by examining the financial statements) and divide by the number of shares - here and get the price of one share. Although it is logical, but the real value of the resulting figure is often not the same. What is the reason? It's easy. Do not forget supply and demand. No one else, as they determine the real value of the shares on which you can buy or sell. It may fall and rise. Thus, the stock market there are risks, which can, however, and causes a high potential of return on capital transactions.

Roughly speaking, the shares have two features. The first - the lack of any warranties. After all, no one can say with confidence, stock prices will fall or rise. Well, the second - dividends. Let us briefly dwell on them. What are dividends? They are part of the profits that the company has received and then paid out to shareholders. Usually dividends - it is a single annual payment, but it does happen, and frequent dividend payments. The amount of dividends recommends that the Board of Directors, after which this figure is subject to approval by the shareholders.

However, in most cases, investors are not interested in dividends, and increase shareholder value. After the dividend is about 0.5-1% of the shares, while the value of the oscillation itself can generate the income of tens of percent per annum.

Start simple - just select from hundreds of tradable shares are those that yield the greatest profit. And, in addition, to buy shares at the right time. Therein lies "not easy". But being a professional is not required. You can do and what turns you most. And you have a choice - you can learn to choose appropriate shares, or use the services of asset management, where professionals have formed a portfolio. You just have to follow these guidelines.

Revenue is proportional to the risk! Higher income - higher risk and vice versa.

the shares and to investors

Briefly about the shares and their attractiveness to investors

Briefly about the shares and their attractiveness to investors

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