How we can invest our money into big companies.


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Uploaded on Apr 29, 2020

PPT on How we can invest our money into big companies.

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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 Source: Google Images 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. Source: Google Images 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. Source: Google Images 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. Source: Google Images 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. Source: Google Images 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. Source: Google Images 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. Source: Google Images 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. Source: Google Images 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