Uploaded on Apr 29, 2020
PPT on How we can invest our money into big companies.
How we can invest our money into big companies.
How we can invest our money
into big companies?
INVEST IN LARGE COMPANIES
One of the main reasons to invest in large-cap
stocks is their size makes them less likely to go out
of business, so they are a safer investment than
small-cap companies. Investors usually flock to
large-cap companies during a contraction in the
business cycle. That doesn't mean they are immune
to recessions
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INVESTING
The best is not usually the cheapest. What that
means is it's worthwhile paying more to get the
best available, because you'll benefit more in the
long run. That is the strategy in investments
because shares in some of the biggest and most
reliable corporations are prohibitively expensive.
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MUTUAL FUNDS
You can invest in big companies through mutual
funds, which also invests in large international
stocks. The investment objective of such schemes
are to seek to generate long-term capital growth
from an actively managed portfolio primarily of
equity and Equity Related Securities.
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DIRECTLY INVESTING IN FOREIGN
STOCKS
For directly investing in stocks of foreign
companies, you will have to open an account with
a brokerage firm that offers overseas trading
facility. You would also need to intimate the RBI.
Once the funds are transferred, you can start
buying and selling foreign stocks on the online
platform.
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GLOBAL FUNDS
Another option is to invest through Global mutual
funds. These funds are denominated in local
currency and there is no limit to investing in these
funds, unlike direct investments which are capped
at US $ 250,000. This is because payment for such
funds is made in local currency and hence no
foreign exchange flows out of the country.
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EXCHANGE TRADED FUNDS
If you want to invest in international indices, then
ETFs mutual funds are the option. Exchange
Traded Funds (ETFs) are investment products
which allow domestic investors to take exposure to
international indices. ETFs are passive investment
instruments based on indices and invest in
securities in the same proportion as the underlying
index.
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BLUE-CHIP STOCKS
Many large-cap companies are also blue-chip
stocks, which are well-known companies with a
history of growth and constant dividend payouts.
These are the cream of the crop. They pay
dividends, have little debt, boast a long history of
stable earnings, but most importantly, they
represent diversified businesses, which makes them
less vulnerable to market changes.
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PASSIVE INCOME
The dividend payments are ideal for conservative
investors and those who invest for passive income
because it adds another income stream, and is
reasonably reliable. They are also a useful source of
income when bond yields are low, which happens
when the government is trying to stimulate the
economy.
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DOWNSIDE
The downside is their stock prices may not grow as
fast as smaller companies because it's hard to
grow quickly when you already lead the market,
and most of these companies are at the top of their
industries. However, they pay dividends to
compensate investors for the stagnant price.
Source: Google Images
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