Do you want to start investing, but don’t know where exactly? What about the terms that belong to the full bases. Investors are probably not surprised, but they will help to orient themselves at least a little. A glossary of what each term means was prepared by Ji Pech, an investment analyst at Broker Trust.
The basis of the return investment is an informed investor who invests in his pension and what to expect from the investment. You will not only enjoy a number of sleepless nights, but also the opportunity to retire.
But getting to know the world of investment is not easy. Going to it without basic knowledge is a carol about knowing the financial first. Even those who decide to shine their finances with experts, for example through mutual funds, should thoroughly perform the functioning of such a fund and get acquainted at least with its investment strategy to avoid unpleasant surprises. And of course to understand the basic investment concept.
Shares are a valuable asset that companies issue in order to raise capital for their business. By purchasing a share, you become the owner of a small company. As a shareholder, you may be the first to vote at the company’s general meeting and to receive a dividend from the company’s profit if the company decides to pay it out to the shareholder.
Some shares are traded on stock exchanges, where their price is determined on the basis of demand and supply. In order to buy a specific share, someone must first sell it. Likewise, if you want to sell a stock, you have to find a buyer. m vt is about the share interest on the part of the buyer, tm dr they can sell the owner. On the contrary, when more than one investor wants to get rid of shares, but there are few buyers, he has to go down in price. So in short utv exchange rate stock price.
If the company does not succeed and has to terminate its business, then the shareholders are usually and last in line with the company, employees, bondholders, etc. It is therefore good to consider how I invest in the company. Much in the risk will be associated with investing in a start-up action not in an established corporation on the stock exchange.
No one can trade on the stock exchange, but this is done through brokerage companies, which are entitled to a license, for example from the Czech National Bank. A broker and a brokerage company were marked for them according to the English model. Register with a broker and give him orders to buy and sell valuables on the stock exchanges. You can get advice or trade from him and invest on your own. Among the most famous Czech traders are Fio banka or Patria.
We can imagine the stock exchange as a trit, from a large virtul, where securities or commodities are traded. The first stock exchange was established in the 16th century in Antwerp and traded on bills of exchange and gold and silver coins. The largest stock exchange in the Czech Republic is the Prague Stock Exchange. The world ‘s best and largest volume of securities is the famous New York Stock Exchange on Wall Street.
The joint-stock company regularly pays its shares according to the profit in the form of a so-called dividend, most often once a year. The dividend is usually determined by the General Meeting for one share, which will be given to those owners who hold the shares on a certain date. When a company decides to pay a dividend of CZK 100 per share, the owner of ten shares will receive CZK 1,000, etc. Regular dividends are one of the main factors for many investors, according to which they decide when choosing a share.
A bond is a security that is typically issued by governments, regions and cities, as well as banks or private companies. The person who issues the bond basically borrows pensions from the buyer and undertakes to repay them by a certain date and to pay the years by then. So this is a kind of loan. Bonds of a functioning state, such as the Czech Republic or Germany, are relatively safe and there is no danger that the state will go bankrupt and not pay off its debts. These bonds currently carry a relatively low year. In contrast, corporate bonds, for example, are interesting investors in this year’s issuing years, but they carry the risk that the company will not repay its bonds, as has happened to us several times recently. It is important to pay special attention to investors who want to come to a small or newly established company, where there may be a risk of inadequate return. In such a case, the investor often assumes the risks of the stock.
We call an investor who has a risk tolerance as dynamic. It invests its resources in assets that usually carry a return, but are also risky (and can fluctuate in value). For example, stocks and stocks share funds focusing on emerging economies and companies.
One of the most important aspects of investing. When the investor decides where to put his pension, he should also determine on the basis of the recommendation or his own experience how long this investment will last, ie set the investment horizon. For example, for mutual funds, a horizon of five, ten or more years may be recommended. It is a time during which the investment should stop even if the exchange rate fluctuates, and at the end it will give the investor a return.
In the investment world, we refer to oil, natural gas, precious metals and agricultural products traded on stock exchanges as commodities. The stock exchanges trade either directly in physical commodities or with various certificates, which guarantee their later delivery. In the case of precious metals, even a small investor can buy, for example, investment ingots or coins. The investor in commodities must realize that these assets do not bear days and dividends, but can only be issued on them if they are sold at your price, not bought.
In investments, I prefer security before the profit. It invests in assets that are of low risk, and for that reason they also bear the value of the currency. For example, choose the funds that invest in bonds. Shares of established companies paying a regular dividend have a smaller share in the portfolio.
Liquidity is a killer that tells you how quickly you can turn your investment back into a pension, ie sell it to another buyer. While you can sell a stock on the stock exchange in a matter of seconds, and its liquidity is therefore high, you can look for a buyer for real estate in peace, so the liquidity of such an investment is low. Investments in non-exchange traded bonds may be similar. The owner will either find a buyer with them, or he will have to wait for the maturity of the bond with his investment.
11.Catch the fund
Investments suitable for beginning investors. The mutual funds are used by the company’s investments and, according to the fund’s exchange, buy various assets from shares through bonds to commodities for the funds invested in them by clients who place them under the so-called share certificates. It is a form of collective investment, where even an investor who does not have a large amount of money can become the subject of the action of you and hundreds of global companies.
The fund is managed by a team of experts who basically do all the necessary work for the client. In return, it sets a fee for the management of the fund in du units of percent of the investment made. The fund management monitors the development of the market and the view of the most suitable portfolio. The fund of funds thus has, for example, shares of hundreds of companies from various industries in its portfolio, or, on the contrary, clearance only to companies doing business in one specific field.
The funds have one-time investments and regular investments, in the value of several hundred crowns per month. The offer of the fund is really wide and the investor can find a fund with a strategy from very dynamic (risky) to conservative (safe). The investor will then sell the catch sheets and turn them back into pensions.
Investments should never be bet on one card. Every investor should divide their investments into more areas, ie diversify. The goal is to create a balanced portfolio, where any losses from late investments offset the profits of others. It is generally recommended to divide your investment between different types of assets, for example to create a mix of stocks, bonds and precious metals or mutual funds of different exchanges.
Unlike an investor, who usually invests in part time, the trader trades in assets in a short time and speculates on their decline and growth. d with the password to buy cheaply and sell appropriately. This approach requires a follow-up and overview of the development of the market, looking for suitable baldness and quick response to exchange rate movements. It is a disciplinary spe for experienced businessmen not arrests.
Appreciated investment, which is the duty of the tiny investor. The percentage of the initial deposit was published. For example, with a percentage input, investments of more than 100,000 crowns will increase to 103,000. Some deposits are taxable. It is so good to pay attention to whether the presented revenues also include possible fees. It is optimal if a given instrument can prove its returns for a long period of time, for example during the last crisis or decline in the financial markets, because it still pays that past returns are not a guarantee of future.