stock investment

@nairjula (453)
India
August 11, 2008 2:14am CST
What do you think about investing in equity? Worth taking the risk?
1 response
@angelia286 (2029)
• Singapore
11 Aug 08
It really depends on which stock instrument that you want to invest into. There are high risk, mid risk and low risk investment instruments out there in the market. Each type of stock will cater to different risk appetite. My recommendation is that if you are the sort who cannot bear to lose all of your capital, try not to go into equities (high risk instrument). Go for something such as bonds (mid risk) or something even of a lower risk. Investment into equities does not guarantee profits, in fact, for some it translates into huge losses which could never be recovered. The thing about equity is that when you win, you win small, but when you lose, you lose big. So, be very careful about it over there. I myself had went into equities investment. I lost about $50 on a $100 investment (50% loss), but on the period whereby there is actual profits, it is only at most $1. Working in an investment firm, I had seen clients records whereby based on a $10,000 investment in equities, profits could be $1K plus, but losses can go up all the way to $5000 upwards. Another thing about the equities market is that it does not run on real time. This meant to say the data at which you buy into and sell off your stocks is not the actual price. For example, I had just recently sold off 1 of my equity - seeing a loss of only $46, however, when my cheque finally came 10 days later, my loss was at $51 (based on the price that is 9 days after my transaction). So, it works like a game of roulette. If you get lucky, you could cut your losses 10 days after you close your account if the prices were to go up during that period of holding, your losses could get bigger if the prices were to go down. There was 1 client of the company I am working in who closed her account while it was making profits, however, when the cheque came 10 days later, she was making a loss. Why? This is because the equity prices actually dropped sharply during the holding period, so instead of making a gain, the net amount resulted into a loss. Think about what you really want, and if you are ready to make any loss, even in 100% of your capital. If possible, go for other investments rather than equities. Forex could be a better alternative (you could limit your losses on this). One thing to note is that there is always a chance whereby you would lose all your capital. That's the thing about investment and you have got to be prepared. Having invested twice, I would say I don't think its worth the risk. There are other forms of investments that if losses would be very low, but the gains is high. I hope that this helps, and of course, it is just my opinion and does not translate into facts.
@nairjula (453)
• India
11 Aug 08
Nowdays stck trading is done online and it all happens real time. The buying and selling can happen in seconds if you have an online trading account. The transaction report is in your hand the same day. The amount on sale can be transferred to a linked bank account instantaneously in a few seconds. Its all real time affair now. The stock you bought half an hour can be watched for its price movement and sold. The problem is only which stock to buy, when to buy and sell. if you know that, u r a winner