Equity investments

Why Equity investments?
When you buy a share of a company you become a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides your portfolio with the growth necessary to reach your long term investment goals. Research studies have proved that the equities have outperformed most other forms of investments in the long term. Therefore

Ø Equities are considered the most challenging and the rewarding, when compared to other investment options.
Ø Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment.

However, this does not mean all equity investments would guarantee similar high returns. Equities are high risk investments. One needs to study and analyze them carefully before investing.

The factors that influence the price of a stock are broadly classified into two and they are
(1) Stock specific
(2) Market specific.

Stock-specific factor is related to people’s expectations about the company, its future earnings capacity, financial health and management, level of technology and marketing skills. Whereas the market specific factor is influenced by the investor’s sentiment towards the stock market as a whole. This factor depends on the environment rather than the performance of any particular company. Thus equity investment is quite a wise option.