Investment share is an investment in your future

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

One of the ways to increase your we alth (that is, financial condition) is to invest part of it in order to make a profit. To date, there are many tools for this process, and one of the most popular is mutual funds. They are created for the competent financial management of monetary resources and are able to bring considerable benefits to their investors, increasing their investments several times. These, as many people know, are collective formations that combine the funds of tens, hundreds and even millions of shareholders into a common fund, which is transferred under the control of the Management Company. It is she who does the main work - invests in securities and other assets, taking part of the profits (commissions) for 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 did this concept come from? Translated from English, "share" is a part, a "piece of the pie", which absolutely reveals itimportance in the financial sector. You buy a tidbit (invest in a fund) and then reap the benefits of that purchase by profiting from its value (the amount of your investment). At the same time, its price will constantly change. An investment share is not a fixed value, but a relative one. It can change daily, depending on fluctuations in the value of securities that are part of the fund's assets. Your share will be determined as a share (in proportion to what % of the total funds 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 profits from the sale of its assets, you have other opportunities. For example, you can sell, gift or bequeath an investment share to family members, friends, acquaintances or colleagues. The fact of the transfer is confirmed by an extract from the register of the shareholder, which is issued by the registrar.

You can evaluate the work of the fund by how the value of the share 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 run. After all, the owner of the share does not receive any real money while he remains a member of the fund. He will not gain any profit (or loss) until he sells it. In this case, the cash reward from a share is the difference between the funds invested in the fund and those received after it was sold.

How to determine how much of the fund's money belongs to you at the moment of its operation? Highlysimply. When initially depositing a certain amount, the number of shares is recorded on the shareholder's account, which is calculated by dividing the amount of his investment by the total amount of the fund's resources (this can also be a fractional number, for example, 542.74 shares). In the event of a sale, this amount is multiplied by the value of one unit at that point in time, resulting in the amount of cash to which you are en titled.

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