Question

1. What are the different ways to invest? Name at least four ways.

2. What is the major difference between the primary and the secondary markets?

3. If I buy a stock by entering a market order, what is my purchase price? How does that differ from a limit order?

4. Where can I get information whether or not to buy a stock or bond?

5. What ways can I reduce risk of loss in my investment portfolio?

Answer 1

As per policy, only four parts of question are allowed to answer at a time, but here questions are answered for you:

1:

The different ways to invest are:

1) Company Stocks: We can invest in the shares of the companies through the secondary market.

2) Commodities: We can invest in the futures of the commodities where things like gold, silver , natural gas, other commodities are being bought towards their future prices.

3) Debt: We can invest in the bond and debentures of the companies for long term.

4) Foreign exchange ie. FOREX : We can invest in the future rate of various currencies either through shorting or going long.

2:

The primary markets are the first hand issue of stock by the user of the fund ie. the company, whereas The secondary markets are where one purchaser sells stock to another purchaser. Primary markets involved in collection of funds whereas secondary markets are concerned with profits on the transactions. The prices in the primary markets are fixed where as in secondary markets they are determined by demand and supply curve.

3:

The purchase price of the stock of bought is where the seller is ready to sell the stock to you. The limit order and purchase price difference is that the purchase price is the executed rates in the market whereas the limit order is quoted rates which are not executed but are to be accepted by the seller of the stock.

4:

The information whether or not to buy a stock or bond are available with the various stock analysis bulletins and newsletters. The suggestions by the Stock investment experts in the investment magazines. The brokers which are registered with the stock exchanges and are authorized to suggest and do the trading of the stocks listed on the exchanges.