Stock market tools
Investing in the stock market is due to the purchase-sale of the instruments of the stock market, exchange-traded. The most common tools of the stock market are:
Shares
Bonds
Futures and options
We consider in detail each one of them.
Shares give the right to receive a share of the profit of the company in the form of dividends and the right to participate in the voting on the main issues of the General meeting of shareholders. In fact, buying a share, the investor acquires a piece of the company and all related rights.
A bond is an obligation of the company (or the state) to pay to the owner of bonds of a fixed amount of cash in a pre-determined time.
Futures and options are derivatives of financial instruments, having its basis in the shares, bonds or other types of underlying assets, used for high-risk speculative operations, as well as with the purpose of hedging (risk management). Futures and options - this is the tool for professionals of the stock market or private investors, who have significant experience of the investment.
The first thing you need to know a private investor on the instruments of the stock market, it is the ratio between profitability and risk for each of the tools.
The notes, for example, provide from 6% to 18% per annum depending on the level of risk. Bonds of the state and the most reliable companies have a yield of 6-7% per annum. Accordingly, the risk of non-payment on bonds in this case the minimum, or conditionally speaking, is almost absent. Bonds of the smaller, less well-known public companies bring as much as 12-15% per annum, one can even find some issuers offering a yield of 18% per annum. Accordingly, the risk of default on these bonds will be significant.
The choice of the bonds for investment - specific moment that requires a detailed assessment of the risks of non-payment, analysis of financial and production activities of the company, etc. However, in fact, we can say that the bonds for the private investor, which is similar investments in Bank deposits, which are also with a high degree of reliability at the present time offer from 8.5% to 13-14% APR., At the moment the bonds are not very popular with private investors due to their low yields. The bond market is the main market of banks, investment companies and other major players of the stock market. The overwhelming majority of private investors, the most popular is the stock market, where there is a possibility to earn more than 50% per annum.
As mentioned earlier, the average investment yield market is in the area of 20-40% per annum. However, during certain periods of time returns on equity reached 80% or even more than 100% per annum. It is in virtue of this opportunity shares are the most attractive investment tool for the private investor at the moment. The traders who use speculative strategy, the yield can vary more widely, and depends on the skill of selling.
Only on the Russian stock market traded shares of more than 1500 companies. Part of the securities traded on the securities exchange market (have been admitted to trading on the exchange) - it shares some 400 different companies, the shares of the remaining more than 1100 companies traded outside the stock exchanges (on the so-called over-the-counter stock market). To start investing in the stock market it is recommended to exchange market, as for access to stock trading company must comply with certain requirements of the stock exchange, and, consequently, on the stock exchange traded shares of the most reliable companies.
Among all the shares traded on the stock exchange, to provide a group of shares of large, liquid and reliable companies with stable indicators of income and dividends. These shares have received the name of «blue chips». Learn shares of companies which are included in this category, you can, looking at the composition of the MICEX index 10. At present, the «blue chips» are shares of the following companies:
Novice investors should start investing in the stock market it is with the shares of «blue chips».
The next, more advanced segment shares, which includes not only the «blue chips», you can specify the list of the 50 companies included in the calculation of the indices of MICEX and RTS. See table below. The difference between indices consists in the fact that MICEX index is calculated on the basis of ruble prices on the Main market of the Moscow stock exchange, while the RTS index is calculated on the basis of dollar prices of the section of the "Classics».
The major indices of the Moscow stock Exchange (MICEX and RTS) are the price, weighted by market capitalization (free-float) composite index of the Russian stock market, including the 50 most liquid shares of the largest and dynamically developing Russian issuers, types of economic activity which are the main sectors of the economy.
Shares included in the calculation of the RTS index, are the most popular for investments. At first it is recommended to explore the possibility of investing in them, and only then proceed to the study of the securities of the other.
In addition to shares on the stock market have received a wide circulation futures and options, which allow you to earn 100% and even more. It is worth remembering that futures and options - this high-risk instruments, in the case of improper actions with them the investor at risk of losing up to the entire amount of capital. Futures and options are used for speculation and management of investment risk professionals of the market, possessing extensive experience in the management of capital. For novice investors we recommend you to first understand the how to invest in stocks, get some initial experience with the shares, and only then proceed to the study of futures and options.
