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how stocks and bonds are used in investment
A stock represents fractional ownership of equity in an organization. It is different from a bond, which
operates like a loan made by creditors to the company in return for periodic payments. A company
issues stock to raise capital from investors for new projects or to expand its business operations. The
type of stock, common or preferred, held by a shareholder determines the rights and benefits of
ownership.
2. common stocks according to their major characteristics
Common stock is primarily a form of ownership in a corporation, representing a claim on part of the
company's assets and earnings. If you're a shareholder, this makes “part-owner,” but this doesn't mean
you own the company's physical assets like chairs or computers; those are owned by the corporation
itself, a distinct legal entity. Instead, as a shareholder, you own a residual claim to the company's profits
and assets, which means you are entitled to what's left after all other obligations are met.
3. fundamental and numerical ways to evaluate stock values
There are two main ways to evaluate a stock. The first way is the use of fundamental analysis. This
involves the examination of information that largely deals on the company’s financial resources and
potentials to operate successfully. It is through this way that you learn about a company.
The second is the use of technical analysis. This examines the price dynamics of the company’s stock
under different market conditions. It is through technical analysis that you will learn about the
company’s stock price. The result of which is a prediction of the stock’s future price. The said
predictions are influenced by anticipated market conditions and trading volumes.
4. an investment's potential return
A rate of return (RoR) can be applied to any investment vehicle, from real estate to bonds, stocks, and
fine art. The RoR works with any asset provided the asset is purchased at one point in time and produces
cash flow at some point in the future. Investments are assessed based, in part, on past rates of return,
which can be compared against assets of the same type to determine which investments are the most
attractive. Many investors like to pick a required rate of return before making an investment choice.
5. use internet to evaluate common stocks in which to invest
With the Internet, an investor can find an online company report from the Securities and Exchange
Commission (SEC) website immediately after it is posted. Large financial documents can be downloaded
within seconds and can be searched for keywords, topics, or specific financial statements. Companies
also maintain online investor relations pages, where these same filings can be found, as can annual
reports and other presentations made to investors at industry conferences.
6. how stocks are bought and sold and how to invest
The following are the most common ways to buy stocks:
Direct Stock Plans Through Companies - Some companies allow you to buy or sell their stock directly
through them without using a broker. Some companies limit direct stock plans to employees of the
company or existing shareholders. Some require minimum amounts for purchases or account levels.
Dividend Reinvestment Plans- These plans allow you to buy more shares of a stock you already own by
reinvesting dividend payments into the company. You must sign an agreement with the company to
have this done. Check with the company or your brokerage firm to see if you will be charged for this
service.
Discount Or Full-Service Broker- Brokers buy and sell shares for customers for a fee, known as a
commission. Many brokers run websites where you can buy stocks.
Stock Funds- Stock funds are another way to buy stocks. These are a type of mutual fund that invests
primarily in stocks. Stock funds are offered by investment companies and can be purchased directly
from them or through a broker or adviser.
7. the features, services, and advantages of investing in mutual funds
A mutual fund is an investment vehicle that pools money from investors and invests the amount in
securities, such as stocks, shares, government bonds, and other money-market instruments. The
primary objective of a mutual fund scheme is to offer optimal returns to the investors. A fund manager
manages a mutual fund scheme and defines the scheme’s objective. However, the fund manager’s role
would vary based on the investment strategy – active and passive investing – more on this later. The
Securities and Exchange Board of India (SEBI), along with the Association of Mutual Funds in India
(AMFI), oversees the working of these fund houses.
8. mutual funds by investment objectives, types and characteristics
A mutual fund owns a portfolio of investments funded by all the investors who have purchased shares in
the fund. So, when an individual buys shares in a mutual fund, they gain part-ownership of all the
underlying assets the fund owns. The fund's performance depends on how its collective assets are
doing. When these assets increase in value, so does the value of the fund's shares. Conversely, when the
assets decrease in value, so does the value of the shares.
9. the fees and charges involved in buying and selling mutual funds
Mutual funds come with a few key fees to consider: Expense ratio, a yearly percentage covering the
fund's operating costs; sales loads (commissions) for buying or selling shares (some funds are no-load
and avoid this fee); and potential redemption fees for selling shares within a short timeframe of
purchase.
10. strategies to evaluate and select mutual funds that meet your investment goals
Selecting mutual funds that align with your goals requires a multi-pronged approach. First, define your
investment horizon (short-term vs. long-term) and risk tolerance. Then, research the fund's objective
and asset allocation (mix of stocks, bonds, etc.) to ensure it matches your goals. Look for low expense
ratios, which eat into returns, and consider no-load funds to avoid sales commissions. Finally, evaluate
past performance alongside a relevant benchmark to understand the fund's risk-reward profile.
Remember, diversification is key, so consider a mix of funds across different asset classes for a well-
rounded portfolio.
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how stocks and bonds are used in investment

2. common stocks according to their major characteristics

3. fundamental and numerical ways to evaluate stock values

4. an investment's potential return

5. use internet to evaluate common stocks in which to invest

6. how stocks are bought and sold and how to invest

The following are the most common ways to buy stocks:

7. the features, services, and advantages of investing in mutual funds

8. mutual funds by investment objectives, types and characteristics

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