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Welcome to the world of investing and trading – Market Analyze
There are many things to learn before investing in stocks, bonds, fixed income securities and trading. We help by use of vital information provided on this website to guide you in your decision making before investing and trading . There is a lot of information throughout the pages of this website like definitions of financial terms, introduction before you start investing, useful tips with trading and investments, strategies in investments and trading, cautions before investing and trading, rating of stocks, rules for trading, glossary of important financial terms etc, which will be using to learn and make up your mind before investing and trading in the market.
There are many reason’s to fear before investing or trading, here are few.
- Fear for insufficient financial knowledge.
- Fear for losing cash with have proper information when to invest and where to invest.
- Fear that investing in market is only gambling.
- Fear for markets which may crash any time.
- Fear without having technical awareness.
- Fear to invest time for study.
- Fear with negative thinking that investment and trading is for only Rich.
Here we provide an excellent articles to boost up your interest and strategies in the world of investing and trading. Read all the articles we post regularly and read brief introduction about markets, trading, investments given below.
Introduction to Investment Types
Basically Investment types categorized as shown below
- Short term deposits/Savings
- Property
- Bonds
- Shares/Stocks
A number of different investments are represented by this category including bank and similar accounts as well as cash management and money market accounts. The underlying investments are a combination of cash, overnight and short term money market securities, treasury notes and bank bills.
Short term deposits/Savings
Cash type accounts are the safest of all investments in that the capital values can only fall due to withdrawals and / or fees. The only other way that capital can be lost is in the unlikely event of the failure of the financial institution to honor withdrawal and whilst this is possible, in reality it is most unlikely. Due to the combination of security and virtual immediate access to funds, these investments produce the lowest rates of return.
Property
There are five main areas of property investment:
1. Residential, such as home units, villas and houses
2. Commercial, such as office buildings
3. Retail, such as shopping centres and individual shops
4. Industrial, such as warehouses, factories and technology parks
5. Tourism, such as hotels, theme parks and holiday resorts
Whilst in theory it is possible to directly invest in all of the above, in practice very few people have the capital resources to achieve even a moderate level of diversification from direct property investment. For this reason a number of alternatives to direct property investments have been developed (for example, property securities funds, listed property trusts and property investment companies) to allow a more balanced investment portfolio.
Property is often regarded as a risk free investment because property markets are fragmented and prices are not determined every day. In reality there are moderate risks involved because the value of a property cannot be known until it has been sold. In addition, problems with tenants can impact negatively upon rental returns. Perhaps the biggest risk associated with direct property investment is its lack of liquidity, as any buyer of property needs to have access to significant funds.
Property has historically provided a good hedge against inflation because property prices tend to rise in a trend, which corresponds with inflation. However, in times of lower inflation and rising unemployment, property returns will be moderate. In fact in times of recession, property prices will tend to fall.
Some tax benefits can be achieved through depreciation of the building and of plant and equipment within it. Expenses incurred to maintain the property are tax deductible. There are also the indexing advantages on capital gains, which reduce the amount of capital gain that is taxable.
Shares/Stocks
A share of stock represents a percentage of ownership in a corporation. In other words, if a company is divided into a million shares and you buy one share, you would own one millionth of that company.
The two basic types of stock are “common” and “preferred.” If you own common stock you may vote on such issues as the company’s business objectives and board members. Preferred stockholders do not have voting rights, but instead may receive dividends – quarterly payments made from the company’s earnings. They also get preferential treatment in the event of a bankruptcy.
Stocks are an important part of many people’s investment portfolio because they have the greatest potential to make the most amount of money. However, stocks are inherently volatile. One day your stock may be worth more than what you paid for it, the next, less.
If you want to know more about Stocks read this article we posted What you should know about STOCKS
Bonds
A bond is a loan to a company or government, with you as the bondholder being the lender. Organizations issue bonds when they want to raise funds. In exchange for the loan, interest (called the coupon) is promised. There are investment grade bonds (low risk, low coupon) and junk bonds (high risk, high coupon). Maturity time frames (the date you get your initial investment back) vary from one to thirty years, depending on the issuer.
As bonds are frequently bought and sold before they mature, investing in them can be very complex. Most beginning investors will stick to the “buy and hold” method.
Bonds are considered a fixed income investment, and so compliment the more volatile nature of many stocks. As a general rule, when the stock market performs poorly, bonds do well. And in the event of bankruptcy, bondholders are paid in full before stockholders. There are also tax advantages to some bonds, such as those issued by municipalities (“muni” bonds), where gains are not subject to federal income tax.
