کیا آپ نے انویسٹمنٹ کرنا شروع کی؟

 

Lessons from Little-Book-Big-Dividends

 

LESSONS FROM: TH

BEFORE INVESTING IN ANY ASSET CLASS REMEMBER ONE THING:

“You should not be as concerned with the Return on Money as you should about the Return of Money!”

NEVER LOOSE YOUR MONEY

 For those millions of boomers who will soon be searching for income in retirement, this book provides you with a road map to monthly dividend checks that will smooth your retirement planning process.

Why own Dividend Stocks

Unlike annuities and bank deposits, which offer only a guaranteed principal and yield that could be dented by inflation, dividend-paying stocks also offer the potential of growth to keep up with inflation.

Are there quality, dividend-paying stocks in today ’s market that are just waiting to make you rich?

The answer is YES. There are dividend-paying stocks in today ’s market that will make you rich.

 

A Recipe for Riches

If you want the recipe for getting rich in the stock market, here it is: Find stocks with above - average appreciation potential and safe and growing dividends, and buy them at attractive prices.

 

Why We Invest in the first place

We invest to get paid. Otherwise, we wouldn’t’ do it. How do we get paid for investing? Two ways:

1.      The value of our investment goes up. You buy a stock at $ 10, and it jumps to $ 20. You made $ 10 on your investment. That $ 10 profit is called a capital gain. If you sell and lock up the profit, you have a realized capital gain. If you still hold on to the stock, you have an unrealized gain.

2.      We receive a portion of the company profits on a regular basis. As a shareholder of a company, you’re an owner. As an owner, you have a claim on the profits of the company in proportion to your ownership.

 

Dividends are usually paid quarterly (every three months), although some companies pay dividends only once or twice per year. Companies may differ in the months when they pay their dividends. Some companies pay dividends in March, June, September, and December; some pay in February, May, August, and November; others pay in January, April, July, and October.

Knowing the dividend - payment dates can be useful when constructing a dividend portfolio to provide regular cash flows to meet financial obligations.

 

A stock ’s total return — the total amount you get paid for investing — is capital gains plus dividends. Let’ s say you own a stock that goes from $ 10 per share to $ 11 per share in a year. During the year, the stock paid $ 0.50 per share in dividends. The stock’ s total return for the year is 15 percent ($ 1 per share in price appreciation plus $ 0.50 per share in dividend divided by the starting value of $ 10 per share). As you can see, dividends represent an important component of a stock ’s total - return potential.

In fact, roughly 40 percent of the stock market’s long - run total return comes from dividends.

 

A stock’ s capital - gains potential is influenced significantly by what the market does in a given year. On the other hand, dividends are usually paid whether the broad market is up or down. The dependability of dividends is a big reason why investors should consider dividends when buying stock.

Another attraction of dividends is that they can grow. And the rising dividend stream not only hedged against inflation but also accelerated the payback on investment.

 

So, what firms pay dividends? They are generally larger, more established companies. Dividend - paying companies have probably experienced their biggest growth spurt and

don’ t require all of their cash flows to fund their operations. Such companies are reasonably confident that their future profitability will support a dividend payment.

Dividends are ultimately paid out of a company’s profits, so pay attention to the relationship between the two.

 

DIVIDEND YIELD

A stock’s dividend yield is computed the same way. You take the amount of dividends paid over the last year and divide by the stock price. For example, a stock that trades at $ 10 per share and paid $ 0.50 per share in dividends over the last 12 months has a yield of 5 percent ($ 0.50 divided by 10).

 

Dividend is not free money

While dividends are often referred to as an investor “free lunch” that’s not exactly true. A dividend is not free money. Think of your own finances. If you constantly paid out cash to family members, your net worth would decrease. It’s no different for a company. Money that a company pays out to shareholders is money that is no longer part of the asset base of the corporation.

You may be surprised to learn that a stock price adjusts downward when a dividend is paid. The adjustment may not be easily observed amidst the daily price fluctuations of a typical stock. But the adjustment does happen.

My Ex

This downward adjustment in the stock price takes place on the ex - dividend date. Typically, the ex - dividend date is two business days prior to the record date. The key thing about the ex - dividend date is that it represents the cut – off point for receiving the dividend. You have to own a stock prior to the ex - dividend date in order to receive the next dividend payment. If you buy a stock on or after the ex - dividend date, you are not entitled to the next paid dividend.

 

The stock market is not perfectly efficient, but one area where the market really shines is in telling investors when a dividend is in trouble. The market sends that signal by hammering a stock.

 

As the stock crumbles, the dividend yield rises. (Stock prices react more quickly to investment risk than boards of directors, which is why the stock price will decline in a big way before the dividend is cut or omitted.) Investors who choose to ignore a stock’s price action when evaluating the safety of the dividend make a huge mistake.

 

 

An unusually high yield can foreshadow big problems at a company

Yield not to temptation. Yield and risk are joined at the hip. Stocks with yields that seem too good to be true are disasters waiting to happen. Avoid them. You need to choose stocks that have attractive total - return potential, not just dividend return.

 

The payout ratio is perhaps the most powerful tool for getting a quick snapshot of whether a company will maintain and grow its dividend. Focus on stocks with payout ratios of 60 percent (0.6) or lower

Find good quality stocks that have a safe dividend that is likely to be increased over time.

 

Finding Big, Safe Dividend stocks

1. Momentum (growth in earnings, cash flow, and sales)

2. Quality (return on investment, return on equity, return on assets)

3. Value (price/sales, price/earnings, price/book ratios)

4. Financial strength (debt levels)

 

Remember: the best stocks to own are those with the best total - return potential.

 

Young investors possess the most important ingredient in producing big returns: time.

One way to hedge against inflation is to focus on stocks that are likely to boost their dividends on a regular basis.

 

The moral of the story: Buying dividend growers is not just a good idea as an inflation hedge. It’s a good idea because dividend growers, as a group, outperform the market.

 

 Retirement Plan: Consider an initial 3 to 4 percent withdrawal rate, especially if you expect to live 20 years or more.

 

Profits every month

By owning stocks with different dividend payment dates, you can receive a dividend check every month of the year.

 

Real Estate investment trusts (REITs) are securities that trade like stocks.

REITs have extremely high payout ratios

 

DIVIDEND REINVESTING

If you want to build wealth over time, cashing your dividends is not the way to go. Reinvesting them is. By reinvesting dividends, you take advantage of what Einstein reportedly called the eighth wonder of the world — compounding. It’s using your dividends to buy more shares of stock — with those shares producing more dividends to buy more shares, and so on, and so forth.

 

Most investors focus on the parts — their individual stocks. The reality, however, is that long - term investment success depends on the whole — your portfolio.

 

By employing diversification correctly, investors can reduce risk without sacrificing returns.

1.      Diversification across assets

2.      Diversification within assets

3.      Diversification across time

4.      Diversification across investment strategies

 

Summary prepared by: Muhammad Saleem Awan

محبت پیدا کرنے والا مراقبہ Loving-Kindness Meditation (LKM)

 

 

Loving-Kindness Meditation (LKM)

محبت پیدا کرنے والا مراقبہ (ایل کے ایم) ایک ایسا عمل ہے جو اپنے اور دوسروں کے لیے گرمجوشی، مہربانی اور ہمدردی کے جذبات کو فروغ دیتا ہے۔ اس میں خاموشی سے ایسے جملے دہرائے جاتے ہیں جو خیر کی خواہش کرتے ہیں، جو پہلے اپنی طرف، پھر پیاروں، غیر جانبدار لوگوں اور آخر کار مشکل لوگوں اور تمام جانداروں کی طرف متوجہ ہوتے ہیں۔ یہ عمل ڈپریشن اور اضطراب کی علامات کو کم کرنے، سماجی روابط کو بہتر بنانے اور ہمدردی بڑھانے اور مثبت سوچ پیدا کرنے میں مددگار ثابت ہوا ہے۔ تجربات میں پایا گیا کہ 8 ہفتوں کے بعد، شرکاء میں زیادہ لچک، مضبوط سماجی مدد، اور بہتر جسمانی صحت تھی۔ یہ بھی دیکھا گیا کہ اس مراقبہ کے بعد پیدا شدہ مثبت جذبات زیادہ بہتر ترقی کے وسائل پیدا کرنے کا موجب بنے اور زندگی میں اطمینان اور لچک میں اضافہ دیکھا گیا۔

مثبت سوچ ہمارے اندر بہت بڑی تبدیلیوں کا باعث بنتی ہے۔ مثبت سوچ ہمارے اندر مثبت جذبات پیدا کرتی ہے۔  خوشی، شکرگزاری، محبت، اور زندگی میں دلچسپی پیدا ہوتی ہے۔ تعصبات نے ہمیں اپنے اپنے دائروں کے اندر مقید کر رکھا ہے۔ یہ مراقبہ تعصبات کو کم کرنے میں مددگار ہیں یہ ہمدردی اور اعتماد میں اضافہ کرتے ہیں۔

اگر آپ ڈپریشن کا شکار ہیں ہر وقت پریشانی اور بےچینی محسوس کرتے ہیں آپ کو ہر طرف منفی چیزیں ہی نظر آتی ہیں تو یہ مراقبہ آپ کو ضرور کرنا چاہئے۔ منفی سوچ کے تحت آپ ہر وقت سوچ کے محدود دائروں میں ہی گھومتے رہتے ہیں۔ پریشانی اور ڈپریشن میں آپ ہر وقت سروائیول موڈ میں رہتے ہیں۔ بقا کے موڈ میں پھنس جانے کی وجہ سے طویل مدتی سوچنا، فیصلے کرنا مشکل ہو جاتا ہے۔ آپ کا دماغ ترقی، تعلقات، یا مستقبل کے اہداف پر قلیل مدتی حفاظت کو ترجیح دیتا ہے۔

 

مراقبہ کرنے کا طریقہ

سکون کے ایک لمحے کے ساتھ شروع کریں: آرام سے بیٹھیں، آنکھیں بند کریں، اور اپنے دماغ کو آرام اور مرکوز کرنے کے لیے کچھ گہرے سانس لیں۔

اپنے دل پر توجہ مرکوز کریں: اپنی توجہ اپنے دل کی دھڑکن کی طرف لائیں۔

ایک وصول کنندہ کا انتخاب کریں: اپنے آپ سے یا اس شخص سے شروع کریں جس کے ساتھ آپ کا قدرتی طور پر مثبت تعلق ہے۔

جملے دہرائیں: خاموشی سے ایسے جملے دہرائیں جو نیک خواہشات کا اظہار کرتے ہیں، جیسے: "میں خوش رہوں،" "میں صحت مند رہوں،" "میں محفوظ رہوں،" اور "میں آرام سے رہوں"۔

دائرے کو پھیلائیں: آہستہ آہستہ انہی فقروں کو دوسرے لوگوں تک پھیلائیں:

ایک پیارا: کوئی ایسا شخص جس کا آپ کو گہرا خیال ہو۔

ایک غیر جانبدار شخص: کوئی ایسا شخص جسے آپ باقاعدگی سے دیکھتے ہیں لیکن اچھی طرح سے نہیں جانتے۔

ایک مشکل شخص: کوئی ایسا شخص جس کے ساتھ آپ کا تنازعہ ہو۔

تمام مخلوقات:

آخر میں، تمام مخلوقات کو اپنی نیک خواہشات میں جگہ دیں۔

آرام کریں اور اختتام کریں:

سب مخلوقات کیلئے نیک خواہشات کے بعد، ایک لمحے کے لیے تعکف کریں اور پھر آہستہ سے اپنے آپ کو کمرے میں واپس لے آئیں۔

یہ مراقبہ دعا کا ایک طریقہ ہے جس میں آپ اپنے لئے خیر مانگنے سے اپنے عزیزوں تک اور پھر بےگانوں کیلئے خیر مانگتے ہیں اور یہاں تک کہ آپ اپنے دشمنوں کی بھی خیر طلب کرتے ہیں۔

 

ایل کے ایم کے فوائد

منفی جذبات کو کم کرتا ہے: افسردگی، اضطراب اور افواہوں کی علامات کو کم کرنے میں مدد کر سکتا ہے۔

مثبت جذبات کو بڑھاتا ہے: خوشی، مثبت اثر، اور خود ہمدردی کے جذبات کو فروغ دیتا ہے۔

تعلقات کو بہتر بناتا ہے: سماجی روابط کو مضبوط کرتا ہے اور ہمدردی اور سماجی رویے کو بڑھاتا ہے۔

جذباتی لچک کو بڑھاتا ہے: جذباتی ضابطے کو زیادہ لچکدار بناتا ہے، جس سے آپ کو تناؤ اور مایوسی سے زیادہ آسانی سے واپس آنے میں مدد ملتی ہے۔

نیوروپلاسٹک تبدیلیوں کا سبب بن سکتا ہے: طویل مدتی مشق دماغ کی ساخت اور افعال میں تبدیلیوں کا باعث بن سکتی ہے جو دماغی تندرستی کو سہارا دیتی ہے۔

https://pmc.ncbi.nlm.nih.gov/articles/PMC4468348/#:~:text=Abstract,clinical%20strategy%20warrants%20further%20investigation.

ترتیب و اختصار:

سلیم اعوان

 

UNDERSTANDING STOCK MARKET

 

WHAT ARE SHARES?

A share stands as a unit of possession in a corporation or financial asset.

However, owning shares in a business doesn’t render a shareholder to have direct control over the business’s day-to-day operations nor makes him entitled to an equal distribution in the profits if they are in the form of dividends.

Each share signifies a proportionate stake in the equity of a company. You can select from buying large or small shares to match the amount of money you want to invest. A company's share price can accelerate or decrease as a result of its own performance or market conditions.

 

WHAT IS A STOCK MARKET INDEX?

When people speak about market going up and down, referring to a performance that is strong or weak or turning bull or bear, this indicates the market as it’s seen through lens of indexes.

The various indexes of the different segments of the market do not move in parallel hence multiple indexes develop.

A stock market index is a measurement of the value of a section of the stock market and is calculated from the prices of selected shares. It is a tool used by investors to describe the market and to compare the return on specific investments. For example, KSE-100 index is a measurement of the value of 100 selected stocks listed on the Karachi Stock Exchange.

 

HOW SHARES ARE MADE PUBLIC FOR THE FIRST TIME?

Shares are made public through an initial public offering using a book building process.

Initial Public Offering (IPO)

Initial public offering (IPO) is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to increase, but can also be done by large privately-owned companies looking to become publicly traded.

In an IPO, the issuer gets the assistance of an underwriting firm, which helps in determining what type of security is to be issued (common or preferred), the most suitable offering price and the proper time to bring it into the market.

IPOs are a risky investment as it is tough to predict what the share will do on the trading day as well as in near future because, there is no substantial historical data to analyze the company’s standing. In addition to that the companies up for an IPO undergo a transitory growth period which is subjected to uncertainty for future values.

Book Building Process

In order to raise money, a company plans on offering its stock to the public and this process is called Book building process. This process is used either by an IPO (Initial public offering) or FPO (follow-on public offers) for effective price discovery. It is a mechanism where, during the tenure for which the IPO is open, bids are collected and compiled from investors at various prices, which are higher or equal to the floor price (lowest price at which bids can be made). The offer price is decided after the bid closing date. As soon as the cost of the stock is determined, the issuing company can then decide upon the division of its stock to its bidders.

HOW TO OPEN AN ACCOUNT WITH THE BROKERAGE HOUSE

To trade in the stock market through registered brokerage house/broker, an investor has to open a trading account with the broker/brokerage house.

• Account opening forms generally can be obtained from the office of the registered brokerage house/broker or their branch office.

• Account opening form of the brokerage houses must include the basic clauses as mentioned in the Standardized Account Opening Form which is a part of the General Regulations of the Exchanges (these regulations are available on website of the exchanges).

• While filing up the Account Opening Form, an investor is advised to read carefully all the instructions printed therein, and if there is any uncertainty regarding any clause it is important to always consult the brokerage house/broker. If the query is not addressed satisfactorily; the investor can contact the Exchange's management and/or the SECP.

• While filling the Account Opening Form investors are advised to be vigilant.

• Investor should never sign any blanket authority allowing the brokerage house/broker and/or agent to transact on their behalf, unless and until he/she can clearly identify the benefits/specific purpose of such authority.

• A copy of certified and duly signed copy of Account Opening Form should be kept for record.

• Remember, that the Sub Account Opening Form does not include a general purpose authorization to the brokers to take care of their client’s securities. Nevertheless, specific authorization for managing the securities may be given out by the client.
•  

ROLES AND RESPONSIBILITIES OF BROKERAGE HOUSE

Brokerage houses/brokers are responsible to carry out the following duties:

• Brokerage houses/brokers must comply with the agreement signed between the investor and them 'in terms of the Account Opening Form'.
• Brokerage houses/brokers must comply with applicable rules and regulations. (Rules and Regulations are available at the website of the SECP www.secp.gov.pk and that of the respective stock exchanges).
• Brokerage houses/brokers must provide the investors with set of rules/regulations.
• Brokerage houses/brokers must comply with the code of conduct enshrined in laws.
• Brokerage houses/brokers must provide trade confirmations to the investors within 24 hours of trade execution.

Brokerage houses/brokers must not take deposits on fixed return.

 

 

RETURN ON INVESTMENT IN SHARES

(Dividends & Capital Gains)

As a shareholder, you own a part of company, which entitles you to a potential profit on your investment. Calculation of Return on Investment (ROI) is the basic part to be understood therefor the definition can be rewritten to suit the situation relying upon what you add as returns and costs.

Let’s take an example:

A marketer takes the comparison of two products by dividing the gross financial gain that each product has made by its respective marketing expenses. On the other hand, a financial analyst would compare the same two products in an entirely different ROI calculation which can go by dividing the net income of an investment by the total worth of all resources that have been applied in the making and selling of the product.

In a broader term, ROI is:

“The profitability measure that estimates the performance of a business by dividing the net profit by net worth”

Making a return on your investment is subjected to on how well the company does - evaluated by its stock performance - and if the company pays a dividend. Capital appreciation (the stock price rising in value), and dividends are the two ways you can earn a return as a shareholder.

• Capital Appreciation

Capital appreciation is:

“Certain rise in the value of an asset based on the rise in the market price”

Buy a stock, and when the price escalates, sell the stock for a profit, or hold onto it and hope that it rises even further over an extended period of time. The amount you make on the stock when you sell it is your "capital gain" for tax purposes. You can calculate your percentage ROI by taking the sale price and subtracting the purchase price out of it. You can now divide that total by the purchase price, and then multiply the amount you receive by 100. What you are getting now is the percentage return on investment. If the stock price drops, you can sell or hold onto the investment and that’s your choice. But you will face a capital loss and a negative ROI.

• Dividends

Dividend is:

“A portion of the company’s earnings distributed amongst its class of shareholders decided upon by the directors.”

Companies distribute a dividend in the form of a quarterly payment paid to shareholders for each share they own. This provides the investors a stream of income. In order to receive the dividend, you must have the shares of the company before the ex-dividend status, (The date at which the person has been confirmed by the company to receive the dividend payment). If you own 100 shares, and the company pays a Rs.10 dividend, you will receive Rs.1000 annually in dividend income.

 

RISKS ASSOCIATED WITH INVESTMENT IN SHARES

Shares can be a sound long-term investment but of course there are always risks to be considered as with any type of investment. These include the following:

1.   Volatility

Share values can be volatile and can fall dramatically in price, even to zero.

2.   Credit Risk

Owners of ordinary shares are generally the last in the line of creditors if a company fails and there may be no chance of getting any money back. 

3.   Unexpected Events

Unexpected events which are outside of your control, such as company specific bad news, a change in government policy or natural or man-made disaster can seriously affect share prices.

 

TYPES OF SHARES

Shares can be widely divided into two categories namely, ordinary shares and preference shares.

1.   Ordinary Shares

Ordinary shares carry no exceptional or preferred rights. Ordinary shareholders are entitled to share in the earnings of the company.  They can vote at the company’s general meeting as well as other official meetings. They are also eligible to participate in any dividends or any distribution of assets on winding up of the company.

2.   Preference Shares

Preference shareholders usually get a significance or 'priority' over ordinary shareholders in terms of payments of dividends or on winding up of the company. There are varying degrees of preference shares having different rights and characteristics. Holders of preference shares are entitled to having a fixed periodic income and have restricted voting rights liable to particular circumstances or particular resolutions; however this is strictly dependent on the terms of the shares. 

 

WHY DO COMPANIES ISSUE SHARES?

Companies issue shares to raise money from investors who tend to invest their money. This money is then used by companies for the development and growth of their businesses.

Company issues different types of shares namely; preference shares, ordinary shares, shares without voting rights or any other shares as are approved under the law. These allow the shareholders a stake in the company's equity as well as a share in its profits, in the form of dividends, and the aptitude to vote at general meetings of shareholders.

 

HOW TO TRADE IN THE STOCK MARKET?

The most common way of buying/selling shares in stock market is via trading through exchanges, where buyers and sellers meet and decide on a trading price. Through a stockbroker you can buy shares from existing investors who wish to sell them and vice versa.

There are also some exchanges which are physical location known as trading floors, where often trading is carried out. You might have come across in pictures where traders are yelling, waving up their arms wildly in air. The other means of exchange is virtual and is carried out via a network of computers where trading can be done electronically.

The aim of a stock market is to simplify the exchange of securities between buyers and sellers which can in turn reduce the risks associated with investing. So a stock market can be considered as a super-sophisticated market providing a linkage between buyers and sellers.

It’s important to have a sound knowledge between Primary and Secondary Market if someone wishes to trade.

Primary Market

Primary market is where the securities are made via an IPO.

Secondary Market

Secondary market is where investors trade the already-issued securities without involving the issuing companies. It is what people refer to when they are talking about the stock market.

An investor or stake holder have to trade through registered brokers/brokerage houses of the stock exchanges and it doesn’t require the direct involvement of the company. Each stock exchange has a number of brokers/brokerage houses which are registered with the commission. Registered Brokers/brokerage houses are allowed to engage in execution of trade on others' behalf as per the laws, rules and regulations. The following points are of key importance if you are opting for trade.

• To ensure protection against fraud and misrepresentation an investor should trade only through registered brokers/brokerage houses and agents.
• To verify authenticity of brokerage house/brokers/agents registration, SECP has uploaded a list of registered brokers and agents of the Stock Exchanges on its website (www.secp.gov.pk). It is important to note that the registration of all the brokerage houses/brokers and agents are valid for a period of one year which is subject to annual renewal.
• Make regular enquiries from your broker/
• If you come across any unregistered/illegal broker/agent, please report the same immediately to the SECP as it is in your own interest and in the general interest of other investors.
• The list of registered brokerage houses/brokers and agents can also be found on respective websites of the Exchanges.

 

HOW TO OPEN AN ACCOUNT WITH CDC?

• "Sub Accounts" at CDC (Central Depository Company) are maintained by the brokers on behalf of its clients (investors), therefore the clients (investors) cannot operate this account directly. However, information about securities lying in its sub account can be attained through broker/brokerage house or directly from CDC.

• Securities available in the sub account are the property of the account holder/investor.

• Another type of account at CDC is the "Investor Account" which allows investors to directly open and maintain accounts with CDC for safe custody and settlement of securities.

• These investor accounts can be opened simply by submitting a duly filled and signed "Investor Account" Opening Form available at the CDC offices or from CDC website available as a downloadable form.

• The account holder is the only person who can withdraw securities from the CDC Investor Account implying security and safe custody of the assets held in the account.

• Investors can keep track of their CDC account position by subscribing the Interactive Voice Response System with call center support through toll free number (0800-23275) or www.cdcaccess.com.pk. More information relating to operating of accounts at CDC and acquiring details, CDC office can be contacted at address and numbers mentioned at the end of the guide.

 

 

COSTS ASSOCIATED WITH BROKERAGE SERVICES

• Stock brokerage costs alter according to the extent of services you avail.
• You should pick out the service that meets your needs and requirements.
• Before you start getting involved in dealing with shares, specify how much you need to pay stockbrokers for the services they offer.
• Charges will vary depending on whether you wish to invest directly or indirectly.
• Enquire if there are any ongoing costs of stockbrokers, apart from the dealing commission each time you buy or sell.

 

KEY POINTS FOR INVESTING IN SHARES

All stock market investors are required to pay attention to the following to avoid any problem/fraud:

1. Verify authenticity of brokerage house and broker/agent.
2. Never sign any blank document or cheque.
3. Always make payment through cross cheque in the name of the brokerage house/broker.
4. Keep documentary evidence of the following:
1. Certified duly signed copy of Account Opening Form
2. Copy of document evidencing payment made to and received from the brokerage houses/brokers
3. Daily Trade Confirmations (in writing) received from the brokerage houses/brokers.
4. Periodical statement of their account and sub-account   statement (which   can   be obtained from CDC in case of maintenance of sub­account)
5. Any communication between the investor and the brokerage houses/brokers
    
5. Furthermore, investors must check for the following on trade confirmation slip:
1. Name and number of securities;
2. Date on which the order is executed;
3. Nature of transaction (spot, ready or forward and also whether bought or sold);
4. Price at which the transaction is executed; and commission charged by the brokerage house/broker.

 

BENEFITS OF INVESTMENT IN SHARES

There are many benefits to investing. Let’s find out how this common form of investment can be an effective way to make money. Here are some of the benefits of investing in shares.

1.   Capital Growth

Selling a share for more than you paid for it is known as Capital Gain. This occurs when an individual experiences significant rise in share prices and is one of the long term objectives of investing in shares.

2.   Dividends

Dividend is a cash reward given out to shareholders as part of the profit made by the company at the end of each financial year. The larger the units of the shareholdings one possesses, the more money one receives.

3.   Liquidity

By nature, shares that are listed are a very liquid product and can be bought and sold quickly over an exchange platform. No hassle of involving a broker or transferee and at a relatively low cost as compared to other financial products. Trading on an exchange also allows one to sell part of the share parcels other than redeeming the whole lot.

4.   Shareholder Benefits

Some listed shareholder companies from different market sectors including entertainment, retail, hospitality and financial services offer lavish discounts to shareholders when they buy goods or services from the companies or their affiliates. However, in most scenarios, lots of shares need to be owned to qualify for such benefits.