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Making Money from Equity Investments

The term 'equity investment' means buying and holding shares of public companies trading on the Mumbai Stock Exchange. By buying the shares, the investor becomes a part of the company. It has a number of advantages, including the right to vote to hire management, share in profits and potential preference for new shares of the same company.

Chittaranajan
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Making Money from Equity Investments

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  1. Making Money from Equity Investments

  2. The term 'equity investment' means buying and holding shares of public companies trading on the Mumbai Stock Exchange. • By buying the shares, the investor becomes a part of the company. • It has a number of advantages, including the right to vote to hire management, share in profits and potential preference for new shares of the same company. • Equity is one of the few ways to make a lot of money. • Equity is for individuals or firms looking to play a 'high risk, high return' game.

  3. This is preferable for investors with relatively high risk appetite. • This is because of the risk of losing the entire investment. • Investing in stocks should be a wise and well-researched decision. • The share price is directly related to the performance of the company. • As a result, it is important to choose promising companies that will be consistently profitable, allowing you to grow over time.

  4. As mentioned earlier, when an investor buys a stock, he or she becomes the proportional owner of the company based on the number of shares purchased. • There are five ways for investors to make a profit from equity investing:

  5. Dividends: • As an owner, the investor is entitled to a portion of the company's profits. • If the company chooses to distribute its profits as dividends, the investor receives a fixed amount for each share he owns.

  6. Capital gain: • When the market value of a stock rises, the investor benefits as he or she can make a profit from the sale of the holdings. • Over a period of several years, the investor can make up to 50 times more than his initial investment.

  7. Buyback: • The Company may announce that it will buy back shares from its shareholders at a price higher than the market rate. • Although not every investor wants to sell their shares, the buyback window allows them to make a profit.

  8. Rights issue: • When issuing new shares, the company may offer discounts to existing shareholders. • Profits can be made by buying shares at a lower price and selling them at a higher market price.

  9. Bonus issue: • If a company performs exceptionally well, it can issue free shares to its shareholders. • These extra shares quickly start trading at market prices, giving investors a better chance of making a profit. • Visit squareoff.co.in to learn the stock market basics

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