FinancePersonal Finance

Investment share is a contribution to your future

One way to multiply your wealth (that is, the financial state) is to invest its part in order to profit. To date, many tools of this process are known, and one of the most popular is mutual funds. They are created for competent financial management of monetary resources and are capable to bring to the investors considerable advantage, having increased several times their investments. This is, as we all know, the collective formations that unite the funds of tens, hundreds and even millions of shareholders in a common fund, which is transferred to the control of the Management Company. It is she who performs the main job - invests in securities and other assets, taking part of the received profit (commission) herself, and transferring the rest to depositors. In order to receive it, you must purchase a share. This is a paper (registered), which confirms your right to a part of the fund's property, and therefore, to its profit.

Where does this concept come from? In translation from English, the "share" is a piece, "a piece of pie", which absolutely accurately reveals its importance in the financial sphere. You buy a tidbit (invest in a fund), and then reap the benefits of this purchase, making a profit on its value (the amount of your investment). At the same time, its price will constantly change. The investment share is not a fixed value, but a relative one. It can change daily, depending on the fluctuations in the value of securities that are included in the asset of the fund. Your part will be determined as a share (in proportion to what% of the total amount you contributed).

In addition to the fact that with the acquisition of a share you get the right to a part of the property of a certain fund and a share of the profit from the sale of its assets, you have other possibilities. For example, you can sell, donate or bequeath an investment share to someone from family members, friends, acquaintances or colleagues. The fact of transfer is confirmed by an extract from the register of the shareholder, which is issued by the registrar.

Evaluate the work of the fund by the way in which the value of the unit changes. Naturally, if it mainly increases, then the Management Company competently operates with the fund's capital. This is very important, especially in the long term. After all, the owner of the unit does not receive any real money, while he remains a member of the fund. He will not gain a profit (or a loss), until he sells it. In this case, the cash reward from the unit is the difference between the funds invested in the fund and those that were received after its sale.

How to determine how much money the fund belongs to you at the moment of its work? Very simple. At the initial deposit of a certain amount, the number of shares is recorded on the account of the shareholder, which is calculated by dividing the amount of its investment by the total amount of the fund's assets (this may be a fractional number, for example, 542.74 units). In the case of sale, this value is multiplied by the value of one unit at a given time, resulting in the amount of money you are entitled to.

Thus, a share is a reasonable alternative to deposits and traditional accumulation. With the right choice of a mutual fund and the competent work of its Management Company, you can significantly increase your investments and achieve the desired results by accumulating on an apartment, car or other purposes.

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