What You Should Know About Equity Investments and Why They Are Good For You

1. What You Should Know About Equity Investments and Why They Are Good For You Individuals and businesses need capital to meet their current funding needs or strategic plans for growth. For this, some of them resort to equity investments to boost their financial standing. What is an Equity Investment? Although inadvertently, a lot of us are already equity investors because the money we deposit in the bank or credit union is invested by the bank into their own portfolio. Many investments are equity by default because even though they do not offer immediate returns, they are safer bets than other types of investment. Equity is a principal class of investment made by individuals or firms, and it is usually in the form of stocks where profits are obtained in the form of capital gains or dividends. The typical investor considers an equity investment as a long-term strategy of maximizing capital. For example, an investor looking for the best place to buy property in London for investment can invest in a share of the property and benefit from its returns over time. Other Classes of Assets Equity is one of two other principal classes of assets that include fixed income (bonds) and cash/cash equivalents. What distinguishes equity from these other types of assets? Fixed income This kind of investment or budget style is one with return rates that are periodic and received at per- determined amounts. Most investors in this category are retirees who like to receive a steady stream of income. Cash/cash equivalents Cash and cash equivalents are a representation of an individual or companies investment assets that can immediately be converted to cash at any time. This may be bank accounts, marketable securities, treasury bills, commercial papers, and short-term bonds. The major difference between equity investments and these other types of investment is in the tenor. While the former is typically long-term, the latter two are relatively short-

2. Advantages of Equity - - There are no charged interests. There is opportunity to make more returns on your principal than when you invest in a bank. However, the major risk is the uncertainty that the company may experience changes in the price of their commodity. For example, stocks in a copper firm will drop if the demand for copper drops and vices versa. Other risks include obsolescence risk, credit ratings risk, and management risks to mention a few. Nonetheless, equities still present a safe form of investment because they are generally reliable and more stable than other traditional investments. Get In Touch CrowdLords Limited Green Cottage, Angel Road Thames Ditton, Surrey KT7 0AU, United Kingdom (South West) Phone: +44 208 133 5321 Email: support@crowdlords.com Facebook: https://www.facebook.com/CrowdLords Twitter: https://twitter.com/crowdlordsltd LinkedIn: https://www.linkedin.com/company/crowdlords Google+: https://plus.google.com/explore/CrowdLords Website: https://www.crowdlords.com/