A company investment makes you a partner effectively in the business. The money entered in the business as the capital or investment is called equity. Amy amount of the equity is always at full risk. You make money if the business makes money and you lose money if the business loses money. In investing your money, an institution is often offering different investment products that have no guarantee in its earnings and in the return of the principal. Good estimates are made based on the wide-ranging operational and financial studies that are conducted by such reputable professionals.
More often than not, the value of your investments increases or decreases depending on the profits gained in the business you made an investment in. But an added risk is seen in the stock market. Values of the best market stocks vary. Either these could go up or down and at times based on facts and rumors. A stock’s selling price which is the real value of a stock is really dependent on the investing public.
Alternatively, if you make an investment in shares of stocks that are unlisted in the stock market, there is such limited capacity in getting your money. There is no definite way for an investment withdrawal when you so desire and need it so much. In general, dependency on the majority shareholder or on the management of the institution is clearly defined if you really want to sell your investment.
Each transaction of a private investment is sole and distinct. Each transaction is different from the other. And if you invest in a private transaction that is offered, you should be sure that you understand the following items:
• The process of income production
• Who else is investing
• The most important of all, how will the investment be returned
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