From today onwards I will blog about Investments. I have been investing for more than 2 years now. I will write more about my mistakes I did so that you don’t repeat the same mistakes.
Let me start the introduction:
What is an Investment?
Investment is related to saving for future or deferring the spending. My understanding is, we buy some asset in hope that we will get positive returns from that asset without us working hard. That asset can be anything like shares, real-estate, finance, business, buying precious metals, commodities and so on.
Usually for technical terms related to investments I prefer google.com and investopedia.com. They help you than anyone else.
What is meant by share?
When a Privately/Individually owned Company goes public then the company is split into finite number of financially equal units called Share.
Shares provide you a unit of ownership in that company. Owning a share does not mean you have control over the day to day activities in the company but you will also be given a chance to make vital decisions in the company proceedings.
A person having a share is called Shareholder. Some companies provide voting option for the shareholders i.e., they can vote while taking a decision along with the board and then depending on the votes the decision will be taken. Consider that, XYZ corp wants to buy AAA corp and every shareholder is given the voting authority. Then to decide whether to buy or not, A voting is held. Depending on the result the company decides to buy. Most of the companies provide this voting authority to its shareholders.
Shareholders does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends.
There are loads to know about shares and other financial instruments. I am not getting into depth of all those as it is not necessary for us. All that I will cover is how to get into stock market and that is my intension, before that I feel we should know certain things and I am doing that.