May 16, 2016
Investing in corporations to build wealth may not be as easy with a fully developed company, although every money manager on Wall Street knows that small corporations with potential for growth can change the lifestyle of any small time investor.
Now the idea of mutual funds sounds appealing to anyone, a pool of money managed by full-time brokers to receive maximum profit. But behind the façade lies an unknown truth.
Stock is Ownership, Mutual Funds is leasing.
A share of stock grants the owner the rights to a certain percentage of a company. This also grants the right to a chance of divided, the distribution of cash among the shareholders, if the company pleases to do so. Ownership also allows the individual to participate in electing board members and partake in the company’s direction and growth.
There are two primary ways of profiting off stock: The first is to hold onto stock and receive yearly paid dividends, which is not as common among corporations. The second, as many brokers refer to, is to buy low and sell high. To buy stock of an up and coming company and to hold onto that purchase and sell once the price skyrockets.
Mutual Funds on the other hand consists of a pool of funds generated by the public to invest into various Bonds, Stocks or Commodities all while under the supervision of professional bankers. Now investment bankers push this idea as the safest road to investment but is it their safest way into commission?
With mutual funds the right to interact within a corporation, that your investment is made in, diminishes to minimum. Not only voting rights are taken but the ability to manage your portfolio individually, meaning that you cannot choose which company to sell off and which to buy more off. Mutual Funds must be sold a whole, which may lead to undesired losses or depreciations of value by stocks that no longer benefit you.
Bottom Line
Now any investment within the market is eligible to losses or gains, but would you rather have the full freedom to manage your investment as you please or leave it within the hands of someone else?
That is why at Punch TV Studios we give you all the information you need to make a promising Investment.
