Investment in Share Market

What is the best way to achieve financial freedom? Should you leave your money tucked away in the bank or plough it into the stock market where the potential for strong returns is greater but the chances of losing money is higher? Most people prefer stock market and why not? But do we know how shares reward an investor?

Friday, February 10, 2006

Why shares?

Whether its retiring early, saving for the childrens’ education or paying off the mortgage, everyone has dreams they can achieve by saving.

But what is the best way to achieve these goals? Should you leave your money tucked away in the bank or plough it into the stock market where the potential for strong returns is greater but the chances of losing money is higher?

Share ownership has become so popular because history has proved that over the long term, shares produce far better gains than other assets such as cash, bonds or property – even if they fall sharply in the short term.

How have shares done this? Its all down to the direct link shares have with company profits and the strength of the economy.

~ From London Stock Exchange

posted by Ho Sang @ 4:30 PM  

9 Comments:

  • At 5:04 PM, Anonymous Anonymous said…

    When you buy stock in a corporation, you own part of that company. This gives you a vote at annual shareholder meetings, and a right to a share of future profits.

    When a company pays out profits to the shareholder, the money received is called a "dividend".

    The corporation's board of directors chooses when to declare a dividend and how much to pay. Most older and larger companies pay a regular dividend, most newer and smaller companies do not.

    The average investor buys stock hoping that the stock's price will rise, so the shares can be sold at a profit. This will happen if more investors want to buy stock in a company than wish to sell. The potential of a small dividend check is of little concern.

    What is usually responsible for increased interest in a company's stock is the prospect of the company's sales and profits going up.

    A company who is a leader in a hot industry will usually see its share price rise dramatically.

    Investors take the risk of the price falling because they hope to make more money in the market than they can with safe investments such as bank CD's or government bonds.

    URL Reference: http://www.stocks-investing.com

     

  • At 5:11 PM, Anonymous Anonymous said…

    Share provides a convenience window for investor to invest they money. As aforesaid, it proved far greater gain then other assets. The questions are how do we make sure our investment is profitable? Which stock acc to buy? When to buy? When to sell?

     

  • At 5:58 PM, Anonymous Anonymous said…

    Well, the profit comes with high risk. I wonder how much time does it takes in order to make profit?

    Are we gonna have a forum to discuss on how to invest?

    Cheers

     

  • At 7:16 PM, Blogger Ho Sang said…

    How can we really know company's upcoming plan? Is there any reliable resource other than their financial report? By the time it is posted in newspaper, it is alwasy too late. Any idea?

     

  • At 3:12 PM, Anonymous Anonymous said…

    Company upcoming plan can be easy obtain from the prospectors and will be review during the AGM meeting. Beside that there are plenty of website and brokers agency do provide investor with the latest news and company announcement with the Security Commission. There are few reliable website like The Edge Daily, KLCI web page and The Star which able to giving us latest news on economy and investment.

     

  • At 3:40 PM, Anonymous Anonymous said…

    I agree with DKCH. U should try reading "Malaysian Business", "Smart Investor" and also "The Edge". But these publishings are concentrated mainly on Malaysian companies and not overseas market. But it is worthwhile to read them. BUt bear in mind that these publishings are not cheap. But its worth reading though. I-capital.biz is another website i found quite useful, but u have to pay for subscription though.
    If any of you guys have other publishing or website which is useful, do post them here. Thanks.

    -CS-

     

  • At 6:51 PM, Anonymous Anonymous said…

    Now a day, it is easy to get information online. However,I find it difficult to understand the financial report of listed company. Anyone can show me some example of understanding? How o I make judgement on it? Thanks.

     

  • At 7:43 PM, Blogger Ho Sang said…

    I have added in the links for the reliable websites suggested by dkch and Anonymous. Hope this will bring convenient to interested users.

     

  • At 12:11 AM, Anonymous Anonymous said…

    There are risk in share investment:

    Inflation of approximately 4% a year for Malaysia market may eat away your savings over the long term.

    If share prices fall, you run the risk of losing money. The oil price and re-peg of Malaysia Ringgit was a terrible experience in year 2005.

    If a company you invest in goes bankrupt, your shares could become worthless. Still remember economic crisis in year 1997?

    However these are not reasons for us to stay out of the stock market. But they should help us recognise the importance of building a broad portfolio with shares in different companies, industries and, even, countries.

     

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