We hear a lot about stocks these days, people who make a lot of money on them and people who lose it all. And we tend to think that it is a world that only a select group of people enter, but if we understand how they serve, anyone can enter this world successfully. Join us to find out what you need to know and how you can implement it.
What are shares?
Like many, you may be thinking that investing is limited to people with large sums of money and access to financial markets. In the past, this may have been a reality. However, new technologies in the financial sector have made transactions more affordable and accessible to non-traditional users, improving their quality of life. If you want to check one of the technologies, you can visit this site.
As is our case, we use a crowdfunding platform with the aim of giving anyone access for the first time to invest in alternative assets that were previously only accessible to individuals with high purchasing power. In addition to educating and serving the forgotten population that only has knowledge of low-risk investments and questionable rates. To fulfill this mission, we will help you learn about certain important issues in the world of investment, today we will start with the actions.
Shares, also known as financial assets or variable value, are part of the total capital in which a company is divided and represent the social capital of a company. When acquiring shares, we receive some rights over the company, that is, we become owners of a percentage of the company, according to the portion of the acquired share.
When we are owners or shareholders of a company, we have rights over that company. For example: right to collect dividends, in case the company distributes them; to vote on important decisions made by the company at its shareholders’ meeting; in addition to receiving discounts, training, passive income from the payment of dividends, among other advantages that we will describe later.
Which companies can sell shares?
The only companies authorized to issue shares and offer them publicly are stock companies, these are those whose share capital is divided among the holders of a share in these companies, each share has the same value, so the capital that enters will be divided between the shares equitably.
The shares of these companies must be nominative and indivisible, that means that you cannot buy less than one share.
Advantages of buying shares
The main advantage that we think of when buying shares is the right to be able to sell them at the moment that is considered appropriate without having to request any type of authorization.
However, buying shares comes with a wide range of advantages, both economic rights and political rights. Among the most important that we can mention are:
Improve Life Quality
By investing in products and services of a certain company, you generate a positive impact in the region, in addition to improving your quality of life by obtaining dividends from it.
You can always diversify to hedge against “risk”
Investors can form an investment portfolio with different stocks, in such a way as to offset the volatilities of one with the other. Adequate diversification is not only achieved by choosing different shares of the same risk class (same industry), but also several shares of different risk class (countries, sectors and investment terms).
Access to information
Shareholders have the right to be informed about the situation of the company. Once the call for the Meeting has been issued, the shareholder can obtain the annual accounts, the management report or any other document they need in order to request clarifications and explanations in this regard.
Likewise, at the Meeting and verbally, they may request the explanations they deem appropriate. Just as companies are obliged to disclose any information that may affect the value of their shares.
In case you decide to invest in stocks, you can opt for crowdfunding platforms where you only have to register, evaluate which company to invest in and accredit yourself.
Since the shareholders are the owners of the company, all of them have the right to attend the shareholders’ meeting, whether they are general or extraordinary meetings, and vote in them. In these meetings decisions are usually made in which you can intervene depending on the type of share you have acquired.
When the company obtains profits, it can decide to reinvest them or distribute them among the shareholders in the form of dividends, this distribution of dividends is known as passive income.
Preference to invest
If the company decides to increase its capital, it can do so by increasing the number of new shares. In this case, the old shareholders have the right to buy those shares before other investors. Although, as we can see, buying shares comes with a large number of benefits, it also carries responsibilities and obligations that shareholders must fully comply with, among these we can mention:
Take the risks
When buying shares in a company, you must assume the possibilities that the price may fall below the value at which you bought them and there is the possibility of losing all the money invested if the shares reach $0. However, losses are not unlimited as you cannot lose more money than you invested.
At reputable, you can feel more secure about share price volatility. Well, unlike the stock market, when investing in a private company these fluctuations are less likely. However, the risk will prevail in that the action will largely depend on the success or failure of the company, since it is a growing business.
Share control of the company
Since there are many shareholders, decisions have to be made through voting and consensus, so that even if you believe that your decision is correct, if the majority thinks otherwise, you will not be able to do anything about it.
When it comes to the stock market, when listing on it, companies run the risk that the value of their shares will be affected by situations beyond their control, such as market forces or speculation in the stock market.
We hope this information was useful.