Today the popularity of the securities as a tool for investment is growing.At the same time they are increasingly purchased by small investors who have little understanding of the economic substance of the instrument and do not know how to assess the quality of investment securities.
security can be characterized as a kind of financial commitment that
confirms the holder's right to receive the profits or ownership of part of the assets of the issuer.
Before you buy debt assets of any company, it is important to assess the quality of investment securities.The most important characteristics are evaluated:
- liquidity - the ability of financial instruments quickly and without significant losses by selling converted into cash;
- profitability - is the ability of capital gains in the case of the purchase and subsequent sale of the security;
- investment risk - the possibility of partial or complete loss of funds invested in a financial instrument;
- uptake - is the ability of the paper to be sold and bought on the market.
All these features affect the present and future value of the asset.
can say that the investment quality of the securities depends on the type of financial instrument.On paper characteristics can influence: the financial health of the issuer, reliability and security of investment and the possibility of conversion.
In general, the stock market is a set of relations, interconnected with the issuance and circulation of financial instruments.The classification of the securities market value is determined by practical:
- for the purposes of market functioning allocate primary and secondary.The first is the relationship about initial placement of securities between investors, the second - the subsequent trade already placed instruments;
- isolated on the degree of organization organized and spontaneous markets;
- depending on the type of winding of stock values - equities, bonds and the like;
- category of financial instruments - the main markets, and derivative securities.
Basic securities are financial instruments that are based on property rights.The most common of these stocks and bonds.
action is a financial instrument that reaffirms the right of the investor to a share of the property of the company, part of his income, as well as the opportunity to participate in managing the company.The action is the equity securities, that is, the money received when issued, owned by the company and non-refundable.
Bond refers to debt securities, it certifies its loan agreement between the issuer and the holder.
the basis of derivative financial instruments are pricing the assets, which include: the price of goods or major securities, credit or foreign exchange market.Such assets shall certify the right or obligation of the holder to acquire or dispose of certain criteria (price, quantity and time) the underlying asset.This group includes promissory notes, options, bills of lading, and many other tools.
promissory note is an unconditional obligation of the person who issued it, to pay the holder a specified amount in the stipulated time frame.
option provides the right but not the obligation to buy an asset at a set price.
Bills of lading are unconditional obligation of the sea carrier delivery of cargo in accordance with the terms of the contract.
diversity of securities leads to the fact that investors in the process of selecting investment instruments confronts an extensive selection.To avoid mistakes when choosing a method investments, you need to carefully study the investment quality of the securities.
