stocks i should invest in

After the crisis, there was a sharp drop in stock market prices, which leads many to think about investing in stocks at low prices in the hope of getting huge returns when the market recovers. Indeed, international experience suggests that in the long term, conventional (non-privileged) shares are the best of the most common types of investments. But it is necessary to take into account also the high risks of such investments and the fact that international experience does not always fully applicable in the Russian conditions.
By March-April 2010 there was a significant increase in stock prices, counting from the bottom reached in the winter. In this sense, the Russian market followed the world. Moreover, its growth, as before, and its fall was much faster than "average."
Given that the crisis is far from over, a decline in stock market prices as the experience of many financial crises, most often occurs in waves, this increase is unlikely to be durable. It seems very likely that in 2010 the share price will fall further. Significant chance that this decline will be deeper winter.
Promotions. General concepts
The campaign - a security which fixes the rights in the profits of the company (dividends), part of the property remaining after the liquidation and to participate in the management of the company.
Formally, the holder of shares of the co-owner of the company and, depending on the type and number of shares has the right to participate in the management of the company. But for the most part it concerns strategic investors interested in participating in it business. Small shareholders, owning a small stake acquired exclusively with a view to generating income, which have fewer rights, their interests are often violated. In the Russian context purely formal "proprietary" rights of small shareholders is manifested particularly clearly.
Income from equity investments
When investing in stocks can receive income from dividends or from changes in the market price of the shares.
Dividend payments on shares
Shares are divided into ordinary and preference shares. When considering investing in stocks from the position of profit is a fundamental difference between ordinary and preferred shares is only in the fact that preferred shares are entitled to receive a fixed dividend, whereas dividends on ordinary shares may not be paid.
Investments in common stock are the most risky, since dividends are not guaranteed. But in the case of a company large profits can be substantial. Dividends on preferred stock, usually strictly fixed and not very high. In this case, it is worth to mention that there are several types of preferred shares. The most common - cumulative - also do not guarantee the timely payment of accrued dividends. They can be accumulated for future payments. There are also participating shares giving the right to participate in the share of profits in addition to the indicated dividend, but the market for them is virtually nonexistent.
It should be noted that income from dividends - this is a very ghostly way of dressing for small investments, rather - it is "a good increase in pensions."
Income from rising share prices
Stock prices are subject to fluctuations in the long run they vary significantly. As one and the other side. And what is due to a high risk investment. You can either win a lot or lose significantly. Trading stocks requires very serious training, but even the experience and professionalism can not save investors from a very significant loss.
How to invest in stocks
In the Russian securities transactions can be carried out on the stock exchange, as well as outside of it. On the stock market will have to work through a broker. It is enough to open a brokerage account and a deposit account with any organization that provides brokerage services - a bank or a financial brokerage company. A service brokerage account to pay commission. It should be borne in mind that not all companies stocks are traded. If you buy / sell shares without going through the stock exchange, it is necessary to conclude an agreement of purchase / sale and report to the receptionist - participant of the stock market, a leading accounting of the rights of ownership of securities.
Also invest in securities is to purchase a share in a special investment fund (Pytheas). In fact Mutual Fund - is a set of stocks or other assets, held in trust by the Management Company. On the one hand, it is quite convenient form of investment as it allows investors with small sums to participate in the profits of the securities market. On the other hand, the investor must have sufficient knowledge to select the time of purchase / sale of the unit. Otherwise, it is likely to buy a share, for example, at the peak of the market growth in the future prove to be a loss. After all, the fund management company never stops selling shares, despite the fact that there are periods when to buy is not reasonable.
You can give the money in trust, in this case, the control itself will take investment decisions for you. This is why control is considered less risky type of investment and, by the way, more profitable. But you need to have invested far more significant than for investments in mutual funds. As a rule, the minimum threshold of entry starts from a few thousand dollars.
Futures and options on stocks
With a high risk appetite may invest not only directly in the action, but also in their derivative financial instruments such as futures and options. This is one of the most high-risk and at the same time potentially the most profitable investment tools. If used, there is a possibility of 100% loss of investment in the shortest possible time.
Derivatives can be used to reduce the risk for major investments where investments are made in such a way as to generate revenue in the fall of fixed investments. This practice is called hedging. However, most derivatives used for speculation.
It is important that these tools can allow a profit not only from the growth in the value of shares, but also on the decline. Actually, this is the main legal way to earn an income in the fall in value of the security situation after the crisis began when the government banned the so-called "short" sale.
Advantages of investment in shares
The share prices of Russian companies have the potential to grow very strongly. They are highly variable. In the past, for many years, these stocks showed respect to forward-most part of the world growth rate. And since reaching a peak value in the spring of 2008, on the contrary, decreased by several times. This fall was much deeper than most, not only developed but also developing markets of foreign countries. That, in principle, can give someone a reason to hope for a rapid growth in the future.
Under normal circumstances, shares of the most popular corporations (blue chips) highly liquid. That is, they can be quickly, easily and at relatively low cost to buy and sell.
There is a developed market infrastructure, which allows someone to entrust such PIFu (mutual funds) into, or to the trustee care of selecting stocks for immediate investment.
Potentially transform the social and legal environment, the real appreciation of ownership, change of corporate culture can significantly increase the cost of many Russian shares.
Cons investment in shares
Investors holding small shares of stock, have virtually no rights to participate in the management of the company. In this connection, their interests, including profit sharing, are often violated.
With the development of the crisis liquidity dropped significantly. Sometimes even sell the stock at a substantial loss to the current price is nearly impossible.
The chances of a positive change in the socio-legal environment that can increase the assessment of the shares in the foreseeable future look insignificant.
Investing in individual stocks is very unreliable. For any of them there is a risk of losses and even complete loss of investment.
Self investing in stocks requires considerable expertise and knowledge. Even most of the professional market for short-term speculation lose. Similarly, long-term investments in funds managed by most mutual funds that invest in stocks, the average market grow worse.
The crisis is likely to be long and deep. On a serious increase in value of the shares is difficult to count up to its completion.
Achieved before the crisis, the level of stock prices was largely due to the speculative boom, heated cheap credit abroad. Even after the resolution of the crisis before the current level may remain for many years unattainable.
Basic guidelines for investing in stocks
If your priority - reliability, the shares unattractive option.
If your priority - high income, then investing in stocks can be quite effective if you are ready for long (most likely, as measured by years) investments and realize their very substantial risk.
To maximize revenue should buy shares at a depth of falling. Clearly while recognizing that very much just to get a chance at least not much.
Very good chance that the prices of most shares further reduced from the current rate. (At the beginning of April 2010)
If you are focused on long-term investments and for a small regular income, then it makes sense to invest in a non-cumulative preferred shares, income derived from them is low, but you do not so much depend on the financial performance of the company. (Unless, of course, the company is on the brink of bankruptcy.)
If you're counting on a big gain on changes in the stock price, the more attractive are the ordinary shares. A pleasant surprise may be the dividend payouts. Sometimes quite substantial.
If your priority - fast availability of funds, the shares today risky option.
Count on them, however, is not necessary. During the crisis, the company's profits is reduced or replaced by loss. In addition, most Russian companies do not pay high dividends.
Acquisition of shares in the short and medium term today only makes sense if you plan to play an active speculative with a very high level of risk.
Self investing in stocks will require you to very high competence or far superior to the average level of intuition. Before deciding on it, you may want to try to work out a conditional package of shares.

stocks i should invest in

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