Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.
Being an Owner
Holding a company's stock means that you are one of the many owners (shareholders) of a company and, as such, you have a claim (albeit usually very small) to everything the company owns. Yes, this means that technically you own a tiny sliver of every piece of furniture, every trademark, and every contract of the company. As an owner, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock.
A stock is represented by a stock certificate. This is a fancy piece of paper that is proof of your ownership. In today's computer age, you won't actually get to see this document because your brokerage keeps these records electronically, which is also known as holding shares "in street name". This is done to make the shares easier to trade. In the past, when a person wanted to sell his or her shares, that person physically took the certificates down to the brokerage. Now, trading with a click of the mouse or a phone call makes life easier for everybody.
Being a shareholder of a public company does not mean you have a say in the day-to-day running of the business. Instead, one vote per share to elect the board of directors at annual meetings is the extent to which you have a say in the company. So if you have a share of Apple Inc. you can’t go and tell Steve Jobs as how to run the company.
The management of the company is supposed to increase the value of the firm for shareholders. If this doesn't happen, the shareholders can vote to have the management removed, at least in theory. In reality, individual investors like you and I don't own enough shares to have a material influence on the company. It's really the big boys like large institutional investors and billionaire entrepreneurs who make the decisions.
For ordinary shareholders, not being able to manage the company isn't such a big deal. After all, the idea is that you don't want to have to work to make money, right? The importance of being a shareholder is that you are entitled to a portion of the company’s profits and have a claim on assets. Profits are sometimes paid out in the form of dividends. The more shares you own, the larger the portion of the profits you get. Your claim on assets is only relevant if a company goes bankrupt. In case of liquidation, you'll receive what's left after all the creditors have been paid. This last point is worth repeating: the importance of stock ownership is your claim on assets and earnings. Without this, the stock wouldn't be worth the paper it's printed on.
Another extremely important feature of stock is its limited liability, which means that, as an owner of a stock, you are not personally liable if the company is not able to pay its debts. Other companies such as partnerships are set up so that if the partnership goes bankrupt the creditors can come after the partners (shareholders) personally and sell off their house, car, furniture, etc. Owning stock means that, no matter what, the maximum value you can lose is the value of your investment. Even if a company of which you are a shareholder goes bankrupt, you can never lose your personal assets.
Debt vs. Equity
Why does a company issue stock? Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods fit under the umbrella of debt financing. On the other hand, issuing stock is called equity financing. Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way. All that the shareholders get in return for their money is the hope that the shares will someday be worth more than what they paid for them. The first sale of a stock, which is issued by the private company itself, is called the initial public offering (IPO).
It is important that you understand the distinction between a company financing through debt and financing through equity. When you buy a debt investment such as a bond, you are guaranteed the return of your money (the principal) along with promised interest payments. This isn't the case with an equity investment. By becoming an owner, you assume the risk of the company not being successful - just as a small business owner isn't guaranteed a return, neither is a shareholder. As an owner, your claim on assets is less than that of creditors. This means that if a company goes bankrupt and liquidates, you, as a shareholder, don't get any money until the banks and bondholders have been paid out; we call this absolute priority. Shareholders earn a lot if a company is successful, but they also stand to lose their entire investment if the company isn't successful.
Risk
It must be emphasized that there are no guarantees when it comes to individual stocks. Some companies pay out dividends, but many others do not. And there is no obligation to pay out dividends even for those firms that have traditionally given them. Without dividends, an investor can make money on a stock only through its appreciation in the open market. On the downside, any stock may go bankrupt, in which case your investment is worth nothing.
Although risk might sound all negative, there is also a bright side. Taking on greater risk demands a greater return on your investment. This is the reason why stocks have historically outperformed other investments such as bonds or savings accounts. Over the long term, an investment in stocks has historically had an average return of around 10-12%.
Visit www.capitalvia.com for FREE stock Tips
Saturday, September 19, 2009
Saturday, August 29, 2009
5 tips to rule in the bull market
www.capitalvia.com
Bull market is a financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.
Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue. It's difficult to predict consistently when the trends in the market will change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.
But if you keep your cool you can rule in the bull market. Here are five key points to remember -
Rule 1
Stick to the desired asset allocation
Asset allocation is the key to successful investing, say experts. Even though equities may outperform debt substantially, it will not be wise to put all your investments in equities.
Investors should allocate assets among various asset classes -- primarily equities and debt -- based on their risk appetite. Given the exuberance in the stock market now, it may be wise not to be overweight on equities.
In other words, commit exactly what your financial planner would suggest depending on your age and other financial goals. More importantly, you need to review the portfolio periodically and rebalance it.
In bullish times, the value of equities tends to rise faster and the equity portion in the portfolio can become disproportionately higher. Downsizing the equity component to stick to the original allocation can help in guarding asset values when the markets fall.
Rule 2
Distinguish between stocks for keeps and trading
When you buy a stock, be clear about your objective behind the purchase -- whether you have bought the stock as an investment or a trading bet. Trading stocks are not bad as such. But they require you to work harder and act quicker.
Rule 3
Buy with adequate margin of safety
That's where attractive purchase prices can help. As a matter of fact, selling stocks is no different from buying them. "If purchasing a stock because it is undervalued, by the same logic, you should get out when it is overvalued. The key is to understand the worth of the stock at any given point," says Raamdeo Agrawal, managing director, Motilal Oswal Securities.
He recommends keeping a sufficient margin of safety when buying a stock and not relying on making a good sale ever. "As long as I am prudent in deciding my purchase price, even a mediocre sale gives me a good return on investment, or at least helps me conserve my capital," says Agrawal.
Also, it is important to remember that the real cost of a stock is not the price you pay for it, but the opportunity cost of not putting your money in another stock with a greater potential to rise. Let's say you hold a smaller pharma company stock and find that a larger one is also available at the same multiple. It may make good sense to switch.
"A larger company, with more liquidity and visibility, will be preferable," says a leading fund manager. While buying a stock most investors look to buy the cheapest of the lot. Indeed, that is the right approach. However, it may not be a good idea to buy a stock just because it is cheap.
Rule 4
Sell when value is realized
Some stocks may rise sooner than you may have anticipated. In a frenzied bull run, investors may see their target prices being met in a matter of days.
Here time should not be of any consequence. In fact, several stocks have more than doubled over the past one year. So it may be time for investors to take home some profits.
If you feel that your investments are adequately valued, you should exit regardless of how long you have held them.
Rule 5
If you realize a mistake, exit
Even while we are talking about selling stocks in a bull market, experts emphasize that if investors make mistakes, they should exit immediately even at a loss.
If you realize that your analysis was flawed or that you got carried away, it's good to get rid of a stock as soon as possible. Waiting for a better price at such instances may prove to be quite dangerous.
Sure Shot Stock Tips from Capital Via Global Research Limited.
Diveya Alok Simon
E-Marketing Executive
CapitalVia Global Research Limited
www.capitalvia.com
Bull market is a financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.
Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue. It's difficult to predict consistently when the trends in the market will change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.
But if you keep your cool you can rule in the bull market. Here are five key points to remember -
Rule 1
Stick to the desired asset allocation
Asset allocation is the key to successful investing, say experts. Even though equities may outperform debt substantially, it will not be wise to put all your investments in equities.
Investors should allocate assets among various asset classes -- primarily equities and debt -- based on their risk appetite. Given the exuberance in the stock market now, it may be wise not to be overweight on equities.
In other words, commit exactly what your financial planner would suggest depending on your age and other financial goals. More importantly, you need to review the portfolio periodically and rebalance it.
In bullish times, the value of equities tends to rise faster and the equity portion in the portfolio can become disproportionately higher. Downsizing the equity component to stick to the original allocation can help in guarding asset values when the markets fall.
Rule 2
Distinguish between stocks for keeps and trading
When you buy a stock, be clear about your objective behind the purchase -- whether you have bought the stock as an investment or a trading bet. Trading stocks are not bad as such. But they require you to work harder and act quicker.
Rule 3
Buy with adequate margin of safety
That's where attractive purchase prices can help. As a matter of fact, selling stocks is no different from buying them. "If purchasing a stock because it is undervalued, by the same logic, you should get out when it is overvalued. The key is to understand the worth of the stock at any given point," says Raamdeo Agrawal, managing director, Motilal Oswal Securities.
He recommends keeping a sufficient margin of safety when buying a stock and not relying on making a good sale ever. "As long as I am prudent in deciding my purchase price, even a mediocre sale gives me a good return on investment, or at least helps me conserve my capital," says Agrawal.
Also, it is important to remember that the real cost of a stock is not the price you pay for it, but the opportunity cost of not putting your money in another stock with a greater potential to rise. Let's say you hold a smaller pharma company stock and find that a larger one is also available at the same multiple. It may make good sense to switch.
"A larger company, with more liquidity and visibility, will be preferable," says a leading fund manager. While buying a stock most investors look to buy the cheapest of the lot. Indeed, that is the right approach. However, it may not be a good idea to buy a stock just because it is cheap.
Rule 4
Sell when value is realized
Some stocks may rise sooner than you may have anticipated. In a frenzied bull run, investors may see their target prices being met in a matter of days.
Here time should not be of any consequence. In fact, several stocks have more than doubled over the past one year. So it may be time for investors to take home some profits.
If you feel that your investments are adequately valued, you should exit regardless of how long you have held them.
Rule 5
If you realize a mistake, exit
Even while we are talking about selling stocks in a bull market, experts emphasize that if investors make mistakes, they should exit immediately even at a loss.
If you realize that your analysis was flawed or that you got carried away, it's good to get rid of a stock as soon as possible. Waiting for a better price at such instances may prove to be quite dangerous.
Sure Shot Stock Tips from Capital Via Global Research Limited.
Diveya Alok Simon
E-Marketing Executive
CapitalVia Global Research Limited
www.capitalvia.com
Monday, August 24, 2009
Stock Market – One of the most exciting place!!!!
“Stock Market – One of the most exciting place!” Isn’t it correct? I know every nine out of ten people will say that. Every second and every minute is decisive and brings a change. Several eyes are on computer screens to watch the stocks moving up and down like a camel. And who rides on this camel surely enjoys the ride. At the end of the day some people are in loss and some in gain. But what so ever result may be they are again setting their minds, ideas and actions to go in the morning and play another inning of their life - To play with shares, to play with stock, to play with commodity, to play with bullion.
All have their mind busy in reading the trends which a particular stock is following for the week and before that and they make a picture of the forthcoming performance of this mammoth stock market in their mind. Their ears echo with the words “Whatever may be the result but we have to invest as it’s all about excitement and thrill”. And really there can’t be more thrill in any other game. Not even in a cricket match of India and Pakistan.
So you can imagine the excitement and thrill involved in the life of traders. Lots of stock to keep an eye on, loads of data and statistics to be studied, may graphs to be deciphered. Its surely requires a lot of guts to invest in the Indian stock market. Profit or loss is a secondary matter but the game is remarkable in itself. People have to hold their nerves, keep calm and cool and react within seconds. Time is the key factor here. If you respond at the correct time you will be the winner and if you lose some time you lose money as time is money.
So if you are planning to invest in the stock and the share market then see, analyze and then act. There are many tips providing companies which are giving tips on how and where to invest your money in the share market. They tell you exactly which stock is beneficial to invest. They give you ideas about when and what to buy and when to sell. Follow the rules and you will surely be the winner. One of the leading among such advisors giving tips and recommendations on stock investment and investment in commodities is CapitalVia Global Research Limited.
A Bangalore based share investment Recommendation Company CapitalVia has got a team of expert researchers and analysts who can tell the trend of the market just by watching the present situation. Their predictions never go wrong. They give the tips with 90% accuracy. They provide 24x7 hrs support. What else to think about now? Simply log onto to www.capitalvia.com for more information and subscribe for FREE trial. They provide two days Free Intraday Trading trial. Join and earn with them.
Free NIFTY CALLS from CapitalVia Global Research Limited
All have their mind busy in reading the trends which a particular stock is following for the week and before that and they make a picture of the forthcoming performance of this mammoth stock market in their mind. Their ears echo with the words “Whatever may be the result but we have to invest as it’s all about excitement and thrill”. And really there can’t be more thrill in any other game. Not even in a cricket match of India and Pakistan.
So you can imagine the excitement and thrill involved in the life of traders. Lots of stock to keep an eye on, loads of data and statistics to be studied, may graphs to be deciphered. Its surely requires a lot of guts to invest in the Indian stock market. Profit or loss is a secondary matter but the game is remarkable in itself. People have to hold their nerves, keep calm and cool and react within seconds. Time is the key factor here. If you respond at the correct time you will be the winner and if you lose some time you lose money as time is money.
So if you are planning to invest in the stock and the share market then see, analyze and then act. There are many tips providing companies which are giving tips on how and where to invest your money in the share market. They tell you exactly which stock is beneficial to invest. They give you ideas about when and what to buy and when to sell. Follow the rules and you will surely be the winner. One of the leading among such advisors giving tips and recommendations on stock investment and investment in commodities is CapitalVia Global Research Limited.
A Bangalore based share investment Recommendation Company CapitalVia has got a team of expert researchers and analysts who can tell the trend of the market just by watching the present situation. Their predictions never go wrong. They give the tips with 90% accuracy. They provide 24x7 hrs support. What else to think about now? Simply log onto to www.capitalvia.com for more information and subscribe for FREE trial. They provide two days Free Intraday Trading trial. Join and earn with them.
Free NIFTY CALLS from CapitalVia Global Research Limited
Friday, August 14, 2009
Stock Trading : Tips and Strategies
The word trade literally means the voluntarily exchange of goods, services or both. But this literal meaning has now given a way to a new and modern definition. Trading now a days stands for the trade in the share or the stock market.
More and more people are gradually getting engaged in this art of gaining or losing money. Starting from a man whose monthly salary is mere Rs. 10000/- to a business man who earns in tons, all are trying their luck, mind and strategies in this game of money.
Those who have good ideas and prepared strategies do make money in this market whereas those who can’t understand the trends and basic logic of the market lose it.
You need not know whole lot of technical stuffs to dive into the depths of trading but still some basic knowledge is required. Here I am quoting some basics one should know before entering into trading. If you want to go further deep then you can go through some specific journals, newspapers, books and articles available on internet.
1. The starters should not go for long term rather they should eye the intraday trading. The reason is that if you hold a stock then its unpredictable what may happen to it overnight as the market depends totally on the global scenario.
2. Divide your capital into 10 equal risk parts.
3. Never trade without providing proper Stop Loss.
4. Follow the trend and don’t trade if the trend is not clear to you.
5. Don’t buy any stock just because of its low price.
6. Don’t expect that you will get profit on every trade.
7. Keep withdrawing portions of your profit and overcome your initial investment so that you trade with safe money which you can afford to lose.
8. Don’t trade with too many stocks at a time. Two or four are enough.
9. Don’t believe in tips/ rumors but on your own experience.
10. Sometimes be ready to accept losses too as they give you a lesson for profit.
HAPPY TRADING!!!!!!
More stock Tips with CapitalVia Global Research Limited
Diveya Alok Simon
E-Marketing Executive
CapitalVia Global Research Limited
URL : www.capitalvia.com
Phone - 07314052800
More and more people are gradually getting engaged in this art of gaining or losing money. Starting from a man whose monthly salary is mere Rs. 10000/- to a business man who earns in tons, all are trying their luck, mind and strategies in this game of money.
Those who have good ideas and prepared strategies do make money in this market whereas those who can’t understand the trends and basic logic of the market lose it.
You need not know whole lot of technical stuffs to dive into the depths of trading but still some basic knowledge is required. Here I am quoting some basics one should know before entering into trading. If you want to go further deep then you can go through some specific journals, newspapers, books and articles available on internet.
1. The starters should not go for long term rather they should eye the intraday trading. The reason is that if you hold a stock then its unpredictable what may happen to it overnight as the market depends totally on the global scenario.
2. Divide your capital into 10 equal risk parts.
3. Never trade without providing proper Stop Loss.
4. Follow the trend and don’t trade if the trend is not clear to you.
5. Don’t buy any stock just because of its low price.
6. Don’t expect that you will get profit on every trade.
7. Keep withdrawing portions of your profit and overcome your initial investment so that you trade with safe money which you can afford to lose.
8. Don’t trade with too many stocks at a time. Two or four are enough.
9. Don’t believe in tips/ rumors but on your own experience.
10. Sometimes be ready to accept losses too as they give you a lesson for profit.
HAPPY TRADING!!!!!!
More stock Tips with CapitalVia Global Research Limited
Diveya Alok Simon
E-Marketing Executive
CapitalVia Global Research Limited
URL : www.capitalvia.com
Phone - 07314052800
SURE SHOT STOCK TIPS – Specialty of CapitalVia
CapitalVia Global Research Limited gives the best STOCK MARKET TIPS. This statement is not a statement given by us but it’s something which our clients say on a daily basis when they get continuous profits whether the market is going bear or bull. And why will it not be so? Here we have got the best analysts of the market to analyze and predict the market.
The accuracy level with which we work is 90% and we are proud to say that our clients always excel in the market. They are happy during the market hours because of the profits they make and they sleep calmly at night without any dreams of terror. With all this we provide 24x7 hours support so as to make the client feel that he is someone special for us. Our primary aim here is the satisfaction of the client.
There are lots of shares and stock advisory firms in the country but these are the things which make CapitalVia different from others. We make feel every client that he is special someone for us. We only give 3-4 calls a day and if the client works on all the calls he surely come with profit at the end of the day. Also we provide proper stop losses. The services provided by us are :
1. Stock Cash Tips
2. Stock Futures Tips
3. Nifty Futures Tips
4. Options - Call & Put Tips
5. Bullion – Metals Tips
6. Agri Pack Tips
So if you are thinking to invest in stock market or the share market and need the stock tips and share tips then CapitalVia is the place where you should be heading. We are sure you will be satisfied to work with us to the highest level. We first satisfy you and then only ask you to subscribe. For this we provide a 2 days FREE trial of our service. Join today and start earning with CapitalVia.
Log onto www.capitalvia.com for details or call us @ 0731-4052800.
Premium Stock Tips with CapitalVia Global Research Limited
Diveya Simon
E-Marketing Executive
CapitalVia Global Research Limited
E-Mail ID : super_share_tips@in.com
Phone – 0731-4052800
The accuracy level with which we work is 90% and we are proud to say that our clients always excel in the market. They are happy during the market hours because of the profits they make and they sleep calmly at night without any dreams of terror. With all this we provide 24x7 hours support so as to make the client feel that he is someone special for us. Our primary aim here is the satisfaction of the client.
There are lots of shares and stock advisory firms in the country but these are the things which make CapitalVia different from others. We make feel every client that he is special someone for us. We only give 3-4 calls a day and if the client works on all the calls he surely come with profit at the end of the day. Also we provide proper stop losses. The services provided by us are :
1. Stock Cash Tips
2. Stock Futures Tips
3. Nifty Futures Tips
4. Options - Call & Put Tips
5. Bullion – Metals Tips
6. Agri Pack Tips
So if you are thinking to invest in stock market or the share market and need the stock tips and share tips then CapitalVia is the place where you should be heading. We are sure you will be satisfied to work with us to the highest level. We first satisfy you and then only ask you to subscribe. For this we provide a 2 days FREE trial of our service. Join today and start earning with CapitalVia.
Log onto www.capitalvia.com for details or call us @ 0731-4052800.
Premium Stock Tips with CapitalVia Global Research Limited
Diveya Simon
E-Marketing Executive
CapitalVia Global Research Limited
E-Mail ID : super_share_tips@in.com
Phone – 0731-4052800
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