Discover the Various Types of Shares

When you were young, you parents made it a point to teach you about the importance of savings. This is something you have always tried to incorporate in your day to day life. However, as you grow older and set out to accomplish all the goals you have in mind, you will begin to understand that merely saving is not enough to achieve the dreams you have for yourself and your family.

This is where the investments come into the picture. There are a number of investment options available, which work to help people achieve their financial goals. The benefits are two fold as both the company and the shareholders receive monetary gains from this agreement.

However, before you start investing you must have some knowledge about the market and the funds that will help you reach your long-term goals. With this in mind, let us take a look at the share types which you can choose from:

•   Equity Shares: These are ordinary which are offered by companies to the general public. The profits of the company are divided among share - holders in the form of dividends. Thus, there is a direct relation between the profits of the company and the percentage of dividend received by share-holders.

•   Preference Shares: These are not regular share-holders of the company they are given special voting rights and are given preference in terms of distribution of profits in the form of dividends.

•   Deferred Shares: These shares are held by the founders of the company, they are also called management shares.

•  Bonus Shares: These shares are distributed amongst existing share-holders free of charge. This is done in contrast to increasing the dividend of shares at times when the company has recorded high levels of profits.

Next, it is time to look at the different bond types that are available for purchase. This is a less volatile option thus the risks involved are relatively low:

•     Government Bonds: These are bonds offered by the government in order to finance their activities. The market is relatively large in India and there are a number of options available for you to choose from.

•      Corporate Bonds: These are issued by corporate organizations in order to raise capital. They offer a good amount of return periodically. They are further divided into convertible bonds and non-convertible bonds.

     Thus, you must set your financial goals and then study the market in order to find the best way you can go about to achieve them. You can then select the investment of your choice and make your dreams a reality.