Nowadays, many people often invest in stocks to earn extra income. So What is stock? good What is stock investment?. Let's answer with HVA now.
What are securities?
There are many people learning about stocks, and the most common question is still What is stock?? It can be said that securities are one of the evidences to confirm the legal ownership of that owner with the assets or capital of a company or an organization that has been issued. More specifically, a share will represent the legal ownership of a business.
Corporations will issue shares in turn, including preferred shares as well as common shares. And when shares are exchanged for each other, they are collectively called securities, so when investing in a stock market, it means you are buying one or more businesses or even owning them.
So what types of securities are there? It can be said that securities include many different types and components, some types of securities can be named as stocks, bonds, derivatives, warrants, depository certificates or investment funds and many other types of securities. And one thing is confirmed that all of these types of securities are deposited at a depository center called Vietnam Securities, which is managed by the state. And currently, it is known that securities will include the following popular names:
Share
When explaining what securities are, stocks are often mentioned, so what is the truth? What is stock?? Or what is the concept of stocks, let's find out right away. And stocks are considered capital securities because they are used to confirm rights and benefits such as attending shareholders' meetings or voting, nominating the board of directors or receiving dividends along with many other activities of those who own a part of the capital of that enterprise. And it can be affirmed that this is the most popular and most traded securities on the market.
Bonds
And What is a bond?? The answer is also a type of security, and bonds are used to confirm the debt obligations of a business or a government to the holders, also known as bondholders. Because bonds are a type of debt security, when a business goes bankrupt or is dissolved, bondholders will be given priority in payment before stockholders, also known as shareholders.
Equity securities
It can be said that capital securities are commonly known as common stocks. And this is a type of security that is issued by joint stock companies and also represents the ownership of a part of the capital or a certain asset of a company to shareholders.
And the owner of equity securities will be paid dividends if the company does well and benefit from selling at a difference in price, which means buying low and selling high.
Debt securities
So what is called debt securities? It can be said that debt securities are a type of securities used to confirm relationships for borrowers as well as borrowers. And when you are a debt securities owner or corporate bond owner, it also shows that you are also a creditor and means that the company must be responsible for repaying the debt. So it can be said more simply that debt securities are a representation of loan amounts, terms, interest rates or maturity dates.
Derivative securities
Many people when learning about stocks often ask a question: What are derivative securities?? It can be said that derivative securities are a financial contract and it is established to confirm the rights and obligations between two parties at the present time, about a transaction that will be performed together at a specified time in the future. And currently on the Vietnamese stock market, there are derivative securities transactions and their prices depend on the VN30 index.
Warrant
Definition of What is a warrant??
Covered warrants are a type of security issued by securities companies and the company will be listed with its own trading code. And the holder of the warrant will have the right to buy and sell underlying securities such as stocks, ETFs or indices, etc. at predetermined prices and times or enjoy the price difference at the expiration date. And certainly the price of the warrant will always be much lower than the underlying securities, but on the contrary, they have high leverage and also know the maximum loss, so it will be suitable for investors with high risk in business.
Stock investment
In addition to learning What is stock?? Then many people continue to wonder What is stock investment?? And should you really invest in stocks or not? Let's answer the question today.
Stock investment is considered an activity of buying and selling products and these products will be listed on a stock exchange. And it can be affirmed that stock investment is one of the most popular types of investment in today's era. And this type will be more difficult than other types such as savings or buying gold for business because it will require investors to have learning as well as experience in financial knowledge, the ability to withstand risks and especially to prepare a strong mentality as well as steadfastness before the fluctuations of stocks.
But not because of the initial economic or knowledge difficulties that many people falter. Because in reality there are still many good investors who were once newbies, so when investing in stocks properly and successfully, you will enjoy compound interest, also known as a money-making effect.
So should we really invest a lot in stocks or not and why is that?
It must be affirmed that there are many names that have succeeded and become rich because of investing in stocks. If you know how to play, stocks are also a huge fortune that you cannot ignore. Because this is indeed a very attractive environment as well as a lot of experience that you can experience and try once. Although there will be significant risks, on the contrary, you will reap high profits and the important thing is to have reasonable, smart and appropriate playing strategies.
And the important thing to note is that if you want to invest in stocks, you must be a person who is adventurous, has a long-term vision, has a mind to analyze the market correctly, and can withstand risks and pressure. In addition, you also need to constantly improve your knowledge of stocks, constantly learn about economics, finance, research and seek out a lot of experience from successful stock experts in the profession before. Having these things will give you the opportunity to invest in stocks successfully and profitably. If you feel that you do not have these characteristics, you need to consider carefully and should not invest in stocks because you may not be able to accept the big risks that may occur in the future.
Hopefully from the information that HVA provide you can answer for yourself about information about What is stock? as well as types of securities and how to invest in them properly. If you are planning to invest in securities, HVA recommends that you should start learning and acquiring knowledge and experience right now to be able to grasp the percentage of successful investment for yourself.
