To invest in stocks – this is today considered one of the most profitable variations of accumulation, safety and increase in monetary resources, of course, only on condition that the rules of the game in the stock market are fulfilled.
If you make a choice in the direction of self-investment of money in stocks, then it is important for you to first obtain all the necessary information and analyze it – for example, perform an analysis of macroeconomic information, study the financial characteristics of companies – issuers of securities, perform technical analysis, and so on.
Without a significant amount of information you will not be able to make a clear and competent investment.
Most potential investors do not have a lot of free time, professional knowledge and technical capabilities in order to independently engage in the right investment of money in stocks or securities and then later manage their personal investment portfolio.
To make investments in stocks of a company that are presented on the stock market, as well as potentially perspective, but still unrecognized, affordable and cheap, organizations that manage assets (AMC), offer people to invest in investment funds whose assets they masterfully and supervised.
The answer to this question is very simple. It’s all about inflation. Imagine a situation that you are simply saving money into a conditional “piggy bank”. With the passage of time, inflation begins to “eat up,” and the value of the saved finances begins to sharply “fall”.
And for this amount of money it is already impossible to buy what else could have been a couple of years ago. Inflation sharply reduces the monetary value, but at the same time, it can raise the cost of shares.
What is a stock? This is a fraction of the property in a joint stock company, in other words, it is some kind of property in the form of goods and services that this joint stock company offers or produces. If, under the influence of inflation, products and services rise in price, then, therefore, the shares of the enterprise that offers them in the trade market also rise in price.
The organizations that manage assets (AMC) ─ are professional participants of the stock market. They form different in their characteristics investment funds, or joint investment institutions. The purpose of creating such investment funds is very simple – in the future to continue to collectively and jointly engage in the investment of funds in stocks.
Investing money through joint investment institutions is a more risky and adventurous occupation, but, in potential, it can also provide the greatest return.
Risks in stock funds can be reduced through professional management and qualitative diversification, when an investment portfolio is created from a wide range of stocks and other securities, and the cost is compensated for by the value of other securities in the investment portfolio.
If you want to try to independently create such a portfolio of diversification, then you will need a lot of free money for this. At this time, asset management companies can manage large, multiple financial means.
Due to this, they have a chance to have the highest degree of diversification in creating equity assets. Thus, the implementation of the key investment requirement is achieved – “not to hide all eggs in one basket”.
It is very fashionable and prestigious to open and create equity investment funds in developed Western European countries, as well as in the CIS countries. Most of all it gained distribution in the East European states, in particular, in Hungary, in Poland and in the Czech Republic.
Assets of funds, as a rule, consist of their shares, and securities, as a rule, funds buy up and resell on a daily basis at the net cost of assets.
The greatest peak of popularity was open stock funds in the 1980-1990s of the last century. It was then that investors were fully able to enjoy all the advantages of a collective investment of finance. But in itself, the idea of joint investment of money is far from new. It has been actively used since the eighteenth century.
For a detailed investment proposal, contact the experts of Eternity Law International.