INVEST IN SHARES

Hey people 

Today I would like to tell you about the importance of investment in shares. Shares mean when the company needs a more investment then the company divides the required amount into small parts and issued to the public, the small parts are called shares. A share stands as a unit of possession in a corporation or financial asset. Each share signifies a proportionate stake in the equity of a company. You can select from buying large or small shares to match the amount of money you want to invest. A company's share price can accelerate or decrease as a result of its own performance or market conditions.

There are mainly two types of shares:

Equity shares or ordinary shares:

Ordinary shares carry no exceptional or preferred rights. Ordinary shareholders are entitled to share in the earnings of the company.  They can vote at the company’s general meeting as well as other official meetings. They are also eligible to participate in any dividends or any distribution of assets on winding up of the company.

Preference shares:

Preference shareholders usually get a significance or 'priority' over ordinary shareholders in terms of payments of dividends or on winding up of the company. There are varying degrees of preference shares having different rights and characteristics. Holders of preference shares are entitled to having a fixed periodic income and have restricted voting rights liable to particular circumstances or particular resolutions; however, this is strictly dependent on the terms of the shares.

Benefits of investing in shares:

 Capital Growth

Selling a share for more than you paid for it is known as Capital Gain. This occurs when an individual experiences significant rise in share prices and is one of the long term objectives of investing in shares.

Dividends

Dividend is a cash reward given out to shareholders as part of the profit made by the company at the end of each financial year. The larger the units of the shareholdings one possesses, the more money one receives.

Liquidity

By nature, shares that are listed are a very liquid product and can be bought and sold quickly over an exchange platform. No hassle of involving a broker or transferee and at a relatively low cost as compared to other financial products. Trading on an exchange also allows one to sell part of the share parcels other than redeeming the whole lot.

Shareholder Benefits

Some listed shareholder companies from different market sectors including entertainment, retail, hospitality and financial services offer lavish discounts to shareholders when they buy goods or services from the companies or their affiliates. However in most scenarios, lots of shares need to be owned to qualify for such benefits.