Behold, I stand at the door and knock. If anyone hears my voice and opens the door, I will come in to him and eat with him, and he with me. Jesus Christ

22 Jan 2016


Hi Friends,   Invest in Shares:    When you buy a share, you’re buying a small part of a company and a share in any profit the company makes.  You can buy shares directly or own them through a managed fund like Mutual Fund.   Shares can rise and fall in value so are better as a long-term investment. 

You can make money from shares through capital gains, where you sell a share for more than you paid for it, and from earning income called dividends.  Like house prices, share prices are generally expected to go up over time and give you a capital gain on your money when you sell.  However, shares can also lose value if the price falls below the price you paid for them.  You only make a loss or a gain when you sell the shares.  Overall the long-term trend is for the value of shares to increase at a rate higher than inflation.  When the company makes money, you’re sometimes paid a share of the profit, called a dividend.  You can choose to receive this dividend in cash, or reinvest it to buy more shares in the company.  If the company makes handsome profit they may give free shares called Bonus Shares.

Risk is the potential of losing some or all of your money.  There are two main types of risk with shares – volatility risk and absolute risk.  Sudden rises and falls in the price of a share is called volatility and some companies have a higher risk of this than others.  Changes in a company’s profitability and in the economy as a whole can cause share prices to rise and fall.  Although prices might fall , you haven’t lost any money through volatility unless you actually sell your shares.  Absolute risk is the risk of losing your money because the company fails and your shares become worthless.  Investing  in a range of different companies and industries will spread your risk and smooth out the ups and downs.  It’s generally not a good idea to put all your money into a small number of, or very similar, investments.  It’s better to spread your investments across shares in different companies, industries and countries, as well as buying other asset classes such as bank deposits, bonds, and property.  This is called diversification.

Thanking you,                                                                See You Later.

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