Capital Markets

Why to invest in equity, bonds, commodities, currencies?

The only way most people have any hope of creating real wealth is by investing in the stock market. Sure, you could invent something awesome, start a billion-dollar company or win the lottery, but let’s face it: Your chances are slim.

Slow and steady is the next-best option to a sudden windfall or wild success. Investing regularly over time gives you control over your destiny – unlike hoping to wake up one day as the heir to a vast fortune.

One of the most compelling reasons for you to invest is the prospect of not having to work your entire life! Bottom line, there are only two ways to make money: by working and/or by having your assets work for you. If you keep your money in your back pocket instead of investing it, your money doesn’t work for you and you will never have more money than what you save. By investing your money, you are getting your money to generate more money by earning returns on what you put away or by buying and selling assets that increase in value

Consider these reasons why you should invest in the markets

Market risk is just one risk of many

► Even though investing seems risky, not investing means taking risks too

► People without a large amount of money saved for retirement run the risk of outliving their savings

► If you don’t grow your money, you may not be able to afford things in the future. So, you invest to grow wealth and preserve purchasing power.

The stock and bond markets are vast- suitable for all

► No matter your situation, there is a mix of investments that will satisfy your varied goals and risk tolerance – as long as your goals and ability to withstand risk are realistic and not a fantasy. You can’t expect a 100 percent return in three months with no risk.

► Varied instruments with differing risk and rewards pay off are available in the markets to cater to the requirements of distinct people and their ideologies

Balanced Asset Allocation- Diversification is the key

► A balanced asset allocation provides the best risk adjusted returns. With the right mix of investments across asset classes and instruments one can control overall level of risk in the portfolio and have some control over the returns of the investments.

What is Equity?

A company organises money to do business with through borrowings and owners contribution. The owners contribution is called equity capital or simply equity. Equity is accumulation of small, equal amounts against which the company issues certificates, which are called shares, stock or again equity. Shares have indefinite life with a face value, which can be changed if the shareholders decide, and no guaranteed return.

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