WHAT IS EQUITY

WHAT IS EQUITY

Definition of equity in simple way is to acquire equity share of a company is just ownership in that company significantly to the extant of share that investor acquired.

For example if any company issue capital of 5 lac share and someone holding 1000 share it mean investor ownership in the company is 0.20 percent.

how investor get return from equity.

Long term as company growth from business to the company as company posting good result your holding share price will also grow by time so investor get return of his investment growth,secondly as company posting good financial number as appreciation in profit companies partly distributed some payment to investor in sense of dividend for example if company announce 30% dividend on 10 rs. face value equity share mean an investor get 3 rs. per share as dividend multiply to his holding equity share.also some good companies also gave bonus share in ratio as company reserve grown up ,bonus share mean investor get free equity share in ratio which declared by company for each equity share held by investor.

Over past few year record prove for long term investor who invested in good companies with good management gave more appreciation then gold and fixed deposit.

It looks investment inequity always be health full to investor who look for long term scenario it may be harm full in case of short term if it invested in wrong time.

Question here is which is best time to invest in equity as well in which company good,in both case first buy when market goes down sharply and everyone is selling and secondly invest in company which have good track record and manufacturing division whose demand always be in market .

Also manage a self portfolio to diversified in sector wise so if sometime single sector not perform well then other grow your portfolio.

Investor must watch price movement of company in which he want to invest and read company profile and work before investing for at least one month time.

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