Question

define the topic and write least five things about this topic (2paragraph)

investing in stocks

Answer 1

Stocks are an equity investment that represents part ownership in a corporation and entitles you to part of that corporation's earnings and assets.Common stock gives shareholders voting rights but no guarantee of dividend payments. Preferred stocks provides no voting rights but usually guarantees a dividend payment.In the past, shareholders received a paper stock certificate -- called a security -- verifying the number of shares they owned. Today, share ownership is usually recorded electronically, and the shares are held in street name by your brokerage firm.

Understand one’s risk-taking capacity, high returns come with high risk. While that’s true, what’s important is to not take this hypothesis literally. The risk is a very subjective variable.Know how to choose asset classes,the inflation rate in India is high and investing more than 50% in debt could generate negative real returns, monthly systematic investments for the rest of your investing life.Understand the availability of investment option,Most mutual fund schemes have two to three investment options built in. These options are typically Growth, Dividend Pay-out and Dividend Re-investment. These are useful to investors and investors should take time to understand the merits/demerits of each option before picking one option.Understand the tax implications,When you invest in an equity mutual fund there is no impact on tax immediately unless there is a deduction to be claimed.Do not book profit frequently,Looking at a certain profit gain initially without giving time to your investments is not a good idea of generating income.