| October 10
What Are Equity Investment and Its Benefits?
about investments make you feel like a grown-up and you feel that you are
bearing the load of forming nation’s financial policies. Investment, indeed, is
a heavy term. When we talk about finance, all forms of investments are
discussed. One such investment is Equity Investment.
What is Equity Investment?
An equity investment is cash invested into an organization through
the purchase of its shares. At the point when individuals talk about it, they
for the most part allude to the purchasing of shares in the stock of an
organization traded on a stock exchange.
People purchase shares with the presumption that the value of
these shares will rise in near future in form of capital gains or it will
generate capital dividends from the firm. The investor is entitled to receive
the benefits only through the re-sale of the shares of the firm or in the case
where the assets of the firms are liquidated meeting all the perquisites.
While the technology has knocked into our lives making investments
and dealing with other financial nitty-gritties has become a lot easier. Now
one can do equity trading online. With so many facilities and ease of access,
investment has also been made easy.
Now, when there is so much of buzz surrounding equity investment,
you ought to know why people are swooning over it.
Why go for equity investments?
You get some amazing perks of investing in equity and through equity trading. Have a look at what you will get by making a
decision to invest in it:
• Dividend: When we talk about return on investment,
dividends are one of the major sources through which an investor will be
getting his return.
• Capital gain: These are the result of an increase in the
market price of the shares & serve as a source of investment for the investor.
• Defined liability: As much the investment, that much the liability.
The biggest benefit to the investor.
• Exert control: By investing in the firm, the investor gets an ownership in the
firm and thus he/she can exert his/her control & is eligible for voting
rights in the company.
• Liquidity: The shares of the firm which are mentioned in
stock exchanges are easily liquidable. These shares can effortlessly transfer
• Bonus shares:These are the free shares given in place of dividend sometimes to
the shareholders. Thus it is also an advantage to the investor.
• Right shares: For the capital expansion a firm issues right
shares. Where current shareholders enjoy priority in terms of investment as
compared to general investors.
• Taxation: Equity investments are long term assets after one year and taxable
@ 10% without indexation with an exemption of upto Rs. 1 Lac. Taxation rates
are lowest in equity as compared to other investment options.
So with so many benefits on the table, one should definitely think
about investing in equity. If selecting right equity shares is difficult then
one can invest via equity mutual funds to allocate money in equity investment.
Don’t hold yourself back and start investing in equity now!