Before diving into the vast ocean of equity investment, you need to get yourself well-versed in its basics. Investment in equity shares has gained a lot of popularity since it offers great returns and can help you create wealth. The retail participants who enter the active market bear witness to this fact. Further, it has turned out to be one fine way to deal with the risk of increased inflation and make sure the savings don’t get eroded as time passes. However, if it’s your first time, you can seek out the experts at Joseph Stone Capital who can offer better guidance. Further, a little knowledge of the equity market will help you make a firm decision in the future.
Know more about equity
The issue of equity shares is one fine way of investing long-term capital in the company. If the company goes public, it will sell its shares to investors and use the proceeds to expand the business. Once the investor purchases a specific percentage of stock in the company, they become part owners of the company, which is equal to their purchase.
This way, you become a shareholder of the company, which will bestow upon you certain rights and benefits as an investor. You can also sell your holding and book some profit if you feel the price is fair. As an additional income, shareholders are entitled to get it if the company declares it.
Equity Investment Types
There are more than 8000 companies listed on the stock exchanges. Every share price can change every minute as per supply and demand. Stocks have a high potential to get value and earn high returns over a long time. However, the stick investment can also be a risky asset. Picking up individual stock can be daunting and risky for seasoned investors. It needs a trained eye and a better understanding of the mechanics of the market.
During your investment journey, you can seek advice from the experts at Joseph Stone Capital. The team here has extensive experience and thorough market research.
Equity mutual funds
These are mutual funds in which money is invested in the stock of various companies by an experienced fund manager. With an equity mutual fund, the fund manager can use their expertise and skills to rebalance and monitor the fund’s composition and ensure the savings are invested in promising stocks. A fund like this allows you to diversify your investments while professionally managing your money.
Why is equity investment a good option?
Purchasing the stocks of strong companies can enhance your wealth with solid returns. As the stock price scales up, the returns will also go high. If the rate of return is compared between the fixed deposits and equity shares, there is no doubt that equity shares can generate good returns.
Deal with inflation
Equity investment can be a great alternative, as the returns generated by the segment often surpass the inflation rate in the long and short term. As a fixed-income investment like a savings account or a fixed deposit pays a fixed interest rate, often less than the inflation rate, the money may lose value as time passes. However, if you keep the risk factor in mind and ensure the income stays steady, equity investment will appreciate.
There is no doubt that equity investment offers promising returns. However, if you are a first-time investor entering the stock market due to high returns, you must understand that the market is volatile, and expert help can be useful.