Basic Understanding Of Stocks For Beginners

Everyone would have come across the term stock at some point or the other in their life. But many will not have a clear understanding about what actually a stock is. The stock is the share of ownership in an organization. It represents the claim one has on the organization’s earnings and assets. As one acquires more stocks, the stake of ownership in that organization becomes greater.

However, the stockholders or the shareholders do not actually own the company, but they own the shares issued by the organization. As per the law, the company is treated as a legal person. It can file taxes, own property and borrow money. Hence, the company will only own its assets and not the shareholders.


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Owning of stocks gives you the power to vote in the meetings conducted by the shareholders, give you the power to sell shares to others and also receive the dividends as and when it is declared. When you hold the majority of share, the voting power increases for you so that you could indirectly have good control over the company’s decision.

Markets dealing with the stocks

Sometimes the stocks are referred to as equities and it is issued by the organization to raise money to grow the business or undertake any new projects. There are two markets to buy the shares from the primary market and secondary market.

Primary market- In the primary market, the shares are directly sold by the company.

Secondary market- The shares are sold by the existing shareholders to others in the secondary market. The shares are sold for the sole purpose to earn a profit.

Different types of shares

The two kinds of stocks which the organizations can issue are called as preferred stock and common stock.

Preferred stock- It is very much similar to bonds and it does not usually come with any voting rights. In the case of preferred stock, the investors are given a guarantee of a payment of fixed dividend. Another benefit associated with this stock is that, at the time of liquidation, the preferred shareholders will be given priority in paying off before the payment is done for common shareholders but only after other debt holders are paid off. Another feature of this stock is that the organization has the option to again re-purchase the stocks later on from the preferred shareholders at any point in time. Hence it is also known as callable shares.

Common stock- Whenever the people mention about the shares, they are normally referring to the common stock. The organization mostly issues this type of stock. These stocks have a claim on the dividends and also have the voting rights. The common stocks give a higher rate of return but it comes with a cost. It comes with a high-risk factor as the investor has a chance of losing all the money if the organization gets closed down or bankrupt. The common stockholders will receive their payment once the money is paid to the bondholders, creditors and preferred shareholders.


Working Capital- Its Importance in a Business


Working capital is the difference between a company’s current assets and current liabilities. This is the simplest meaning of working capital. Current assets of a company are the assets which can be easily converted to cash in a period of one year and current liabilities of a company are the obligations or debts of a company which is due within one year. These two are the most important part of the company’s financial statement called the Balance sheet. Just like their presence is important and evitable their role in the organization’s working is also important.

Current assets can be cash, equivalent to cash, customers unpaid bills or nay cash forms and current liabilities can be accounts payable which means the amount of cash due to any source which connects with the company’s working.

Thus we derive the basic formula to calculate working capital as the subtraction of current liabilities from current assets.

Important features of working Capital:

A company is judged by third parties based on its working capital position whether it is profit making or loss-making and its general financial health. Some points which are essential to it are :

  1. Measures the functional efficiency and strength of a company in financial terms.
  2. A healthy company with a positive working capital situation will be represented in the ratio form of 1.2 till 2. This is called the current ratio
  3. Having more of current assets so that the obligations can be repaid effectively and timely.
  4. The company should be preventive of working capital that may be a negative value at all time an ensure safety of its assets.
  5. Also, a company should avoid a high working capital which is an indication that the company doesn’t fully use the assets to generate revenue.

Need for working capital:

The company needs working capital in a positive ratio due to some very specific reasons which can be :

  • It is essential to have a good working capital ratio to avoid the business from facing financial insolvency, legal problems and from the liquidation of its assets.
  • A good working capital ration enables the business to sustain as well boost their earnings.
  • Having current assets in a higher amount will result in better profits and ensure a long life for the business.
  • Working capital management must be done in order to frequently monitor the position of a company’s assets and liabilities.

Thus the business growth and its long-term sustainability are based upon the working capital position of it and how it has been regulated.



The Technology Blockchain Implementation to Humans


The next level application of bc technology might be used to signal the truly big data relied upon complex kind of mechanisms and working models. These are referred to as higher order magnitude prototypes ‘Genomic Sequencing’.

  • Adding the present feature of bc knowledge to the current sequencing methodologies could possibly enable the complete study of the human genome on industrial-scale. This happens to be the best innovation ever made.
  • It would be similar to DNA blockchain sequencing functionality which makes it possible to represent and cloud-store a whole-human genome structure. Further, this would account for the most outstanding data storing capacity including almost 3,760 whole human DNAs and nearly 10,800 exomes. This collected information record is based on approximately 8 billion humans.
  • The main benefit of such repository is that it allows an open access to a certain population and helps in developing computing projects mainly focused on genomic medicine and personalized medicines.
  • The explicit use of the app GenomeCoin, expand the availability of accessing any individual being on the move. Additionally, this app contributes to the tracking, arranging and crediting events based on sponsoring mechanisms in the Genomes Data Collection community of commons.
  • The release of Wikinomics like website makes a dream come true in making and storing highly potential and diverse individual genomes sets database which can be accounted for both present and future studies.
  • Further, the introduction of bc technology in economics helps in embedding automatic updating feature where genome sequencing and storage is exploited for research and this characteristic of blockchain economics tracks and account with GenomeResearchCoin as a micropayment stipend.

Blockchain and Human Health

Projects are already on its way to record and track, exchange and provide access to different kind of digital assets including the human health asset. This means the technology of bc can be applied for health-related purposes. The potential advantage of blockchain health record storing is that this data can be analyzed but will remain private itself.

  • A major application is the use of a Healthcoin which is a token type spend on national health services. This innovation is helpful in tackling the economic inefficiencies within the health industry. Uniqueness and price transparency are the main pros of this system.
  • Another revolutionary idea is storing and managing the electronic medical records or say EMR to a digital address which has only a private key access. By this means, any person could allow doctors or pharmacies to view their health status by sharing the secret key.

Researchers are going on to help with every human health-related difficulty and soon blockchain technology will assist us.





Different Funds And Their Objectives


When we talk about fund management, we also need to give a thought to what the different types of funds are. Different companies and fund managers manage and control different types of funds and the strategies, theories, and approaches that are used in managing and controlling them are all the same, the ones that are discussed as the basic ones for fund management. Let`s now take a look at what these different types of funds are and what their major objectives are:

  • Mutual funds– this is probably the best and the most commonly used funds for making investments in stocks and securities. Another reason for their popularity is because they are easy and simple to operate and hence it is probably the ideal option for investments in stocks, commodities, and securities. So this is an easy mode for anyone to make investments in the financial market to meet the financial goals. Here there are also possibilities for diversified investments in assets and securities thus making it easy for the company to offset the losses experienced in one or the other securities.
  • Exchange traded funds – this is very similar to the index mutual funds because it is based on the index and tracks the movements and indexes of assets and commodities that are traded in the market. But they are actually different from the mutual funds and can be easily traded like the shares and bonds that are bought and sold on a regular basis. So these funds can be bought for less, sell for more, held for a particular period of time expecting an increase in the prices for earning more when sold.
  • Closed-end funds – these are generally offered by companies at the initial public offering. Here the numbers of shares offered to the investors are restricted to a limited number, unlike the open-end funds where there are shares or commodities offered to the investors regularly without any restrictions. These limited numbers of shares may be sold at a higher or lower value leading to either a premium or a discount.

Though we have these many numbers and types of funds, their core objectives remain the same. It is only the other additional features like growth, income, capital preserving etc that differ from one fund to the other. So before a trader or an investor makes a move here regarding the mutual fund selection, he needs to first know the right one for meeting his objectives.

What should businesses know about market fluctuations?


When there are fluctuations in the stock market the investors have a hard time in stabilizing their portfolio. But it is not just the equity investors that are affected. The changes are felt by the business owners as well. Whether the business has a public offering or whether it is a small business or whether it is a start-up that was recently launched, the impact is felt. The extent to which the business takes the effects is what varies.

What is the relationship between market trends and the business?

  • The relationship between fluctuations in the market and the business’ performance is often not a direct one, especially if the business is small and if it has still not offered stocks to the public.
  • The changes in the market would subsequently lead to changes in the economy.
  • There might also be changes in the prices of commodities. Currency value might fluctuate and this might have an impact on the exports and imports.
  • Recession affects the spending behavior of the consumers.

All these factors put together to affect the performance of the businesses. Those with recession ready strategies are the ones that can reduce the risks. Those businesses that fall in the collection of industries that do not take a hit by recessions can make use of the opportunity to increase the returns on the capital. So the falling market would also turn out to be a great investment opportunity for such businesses.

A change in the competition

The competitive situation that prevails during the normal market conditions might not be the same when the market fluctuates strongly. Some businesses rise above the competition and some give in to the market conditions. So if a business studies the competitors it can understand the type of competition to expect during market fluctuations. The condition varies based on how the competitors react to the changes.

Income through orders and investments would also be affected

Consumer behavior is one thing that changes first when a recession happens. People might be more vigil in their expenses. So as a business owner you should understand whether the customers would be really in need of your products even during recession and price changes. One other way in which you receive your funds would be your investors. Investments that had earlier been planned might also be delayed if there is a sudden crash in the market. Investors often wait for the market to obtain a stable and might take some time to rethink their investment decisions.

Why are equity mutual funds a better choice?


There are several types of mutual funds followed by several subcategories that can leave the beginner confused. But basically, the two types of funds that one has to encounter are the debt mutual funds and the equity mutual funds.

Equity mutual funds are recommended for long-term investment because of the higher returns potential. If you are contemplating on which one to choose, read on to know why equity mutual funds are a better investment choice for beginners.

Anyone can invest

There is no minimum investment amount to invest in these funds. Therefore, you can start off with the least amount that will not put a burden on your monthly finances, to begin with. You can, in fact, link it to your bank account wherein each month the said amount will be deducted on a predetermined date.

Better returns

There is no doubt that the risk involved with equity funds is high at the same time the returns are also significant, probably high enough to even beat inflation. You are assured of the substantial amount over a period of time when you invest in these funds.

Funds are diversified to minimize the risk

Your fund manager will advise you on how the funds will be spread in various sectors to minimize risk. As a result, even if some stocks underperform there will be others which might overperform and even out the losses and maybe even make a considerable profit. Of course, this does not mean that you can overrule the risk factor completely.

Suitable for long-term financial goals

Time and again we have seen that even if the market goes down it eventually bounces back and hence investing in equity funds as a long-term option is good for your future goals despite the risk. Not all equity funds are high risk; they are categorized into high, medium and low risk. But higher risks mean greater returns.

Easy liquidity

There is no lock-in period with mutual funds; as a result, you can get your corpus back to your bank account any time you choose. Thus, in times of financial difficulties, you can redeem all your investment without any penalty.

And if you are still worried that you do not have sufficient knowledge of equity mutual funds, your fund manager will educate you. And in case it is beyond you to understand the numbers leave the hard work of keeping track of the market to your fund manager. Though being in the loop will be beneficial for you.

Are You Making These Common Mistakes During Risk Assessment?

Risk assessment is a significant part of building up your business platform. However, it is also important to assess the right risks at the right time so that we are always alarmed well before a financial mishap is about to happen. Studies show that mistakes made during the assessment of risks are a common thing to happen and listed below are some of the commonest mistakes that you could avoid at your end.

Restricted significance

Most companies begin the whole process of risk assessment when there is a legal reason to do so. Till then, they are hardly concerned about the need to assess potential financial risks. This is a huge mistake. Yes, the legal requirement is definitely a reason to start the process but since it plays a major role in ensuring the safety of your business all the year round, it should be a non-negotiable activity.

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From a distance

Risk assessment does not happen from a distance. You might come across a hundred advertisements on the Internet that claim to help you assess the level of risk for your business with software that is more efficient than humans. However, that it a lie and is yet another way to get you to buy unnecessary applications. Risk assessment happens when you get involved in the process and talk to the people who are in the company. You will have to personally catch up with everything that your business is associated with.

Seeing as far as control measures

It is not only important to know what control measures need to be in place but it is even more important to know whether these measures are being implemented or not. Furthermore, it is required to take note of whether the implementation makes a difference to the level of risk or not. Simply restricting your knowledge to the control measures is never enough.

No plan in sight

Now that you are aware of the potential risks, the next step is to keep a plan ready if these risks hit your business and you are impacted. You should have a list of plans and actions ready for use and for that frequent drills should be carried out so that the plans are not only limited to a Word document on your laptop. The plans should be made a part of meetings and discussions so that they can be updated time and again to keep them relevant.

Risk assessment forms the foundation of safety planning for your business and it should always be made a priority.

Impact Of Inflation On Real Estate Business

Inflation is a word that most entrepreneurs are petrified of. It can be a big deal for many business owners because rising prices and reduced supply rates can bring their profitability to a standstill and can also cut down their funding sources. All these factors can make a business owner lose sleep but when it comes to a real estate business, these factors do not apply. In fact, inflation could mean good things for real estate business owners. It actually benefits during phases of inflation. Cash tends to lose value when held over a long time but real estate investments have the potential to turn into positive equity when held over time.

Real estate is inflation proof

If your business is about investing in real estate then you will be happy to know that the industry is inflation proof. There have been no major ups or downs in housing prices with respect to inflation for several years now. The primary reason for this is the fact that housing will be a basic human need and it will always be in demand, no matter what.

Real estate appreciates

There are a number of benefits when it comes to holding on to real estate. There are advantages like reduction in taxes, reduction in debts, no need to pay rents etc. It has been noted that price appreciation is almost always at the same pace as that of inflation.

Positive cash flow

Cash flow is often a big factor where inflation is concerned. Most businesses are apprehensive of the halt in cash flow and of funds from external sources. As far as real estate investment is concerned, cash flow is generally continuous. This is because even if the property is running on rent, the rent has to be paid and with rising inflation and increased cost of living, the wages are also expected to increase. Thus, there is no fear of cash shortage.

Always in demand

Have you ever heard of a highly populated area suddenly being vacated unless and until there is a natural calamity in store? This is precisely the point. There will always be people looking for homes because human beings will not stop procreating and the more the population, the higher the need for homes. If you have a real estate investment, you can rest assured that your business will always thrive.

The need for shelter is a primary human need and this is what will always keep the real estate business in demand.

Own Your Dream Home When You Wish

When is the right time to have a house of your own? When you have the funds ready. When is the right time to take a home loan for your dream house? When you wish. We often wait and watch for the interest rates to come down and the terms and conditions to relax so as to meet our limitations. THE WAIT IS OVER NOW! The moment you find the house you wish to make yours, we work to convert your wish into reality.

With the shortest processing time and the lowest interest rates, the feature of lock-in period of home loan sanction is what makes us your best home partners.

Our lock-in facility

You have decided on which property to buy and have made all the necessary documents ready. There may be shortfalls in arranging the amount required as downpayment from your side or you may want to wait till the existing vehicle loan is closed. Sometimes, the house may be occupied by the current owners who need some time for relocation. For the above-furnished reasons or some other reason, you think about stalling the full purchase of the property with the loan to a specified amount of time.

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The decision is right financially, for why should you start paying the home loan interest when you still have the ownership transfer pending. This is where the lock-in facility comes into play. You may be currently residing in a different city and running again for loan processing becomes difficult. When you decide on the property to be purchased, complete all formalities with us regarding the documents and wait for the application to be processed. Within days of verification, your loan will be sanctioned but the disbursement dates will be decided by you.

The initial lock-in time is for one year and can be extended on justifiable grounds. We do not charge any extra fees for the same and you do not pay any installments or holding fees during the period.

You can opt to freeze the interest rate until the time of ownership transfer. That is, the rate of interest rate during the time of submission of the application time can be fixed for the initial repayment schedules. The interest changes into floating rate only after the fixed time period as given in our terms and policies.

The lock-in period will not be considered in the tenure and you can enjoy the dream to come true the moment you click the release button.