If you’ve been considering obtaining stake in a company, then an equity investment may offer an appropriate option for you. Understanding how equity investments work can help you evaluate all the options, benefits, and risks being a shareholder can entail. Miser Wealth Partners can take the guesswork out of this form of investing so you can have the peace of mind knowing you’ve made a smart choice for the placement of your money.
What are equity investments?
Since equity investments are shares in a company, they’re essentially the same as stocks. That said, if you purchase stocks in a private or public company, you’re also purchasing equities. Because equity investments don’t pay a fixed interest rate, they don’t offer guaranteed income. But they can allow investors to potentially make sizable profits in a frequently changing market. Becoming a shareholder by owning these equities entitles you to a portion of profits and assets that a company makes.
Why should I choose equity investments?
The objective of any investment is to increase capital. People who choose equity investments purchase shares with the expectation that they’ll rise in value in the form of capital gains, and/or generate dividends. Therefore, capital gains and dividends are key reasons to consider equity investments. If your equity investment increases in value, you would receive the monetary difference if the shares sold or if the company’s assets are liquidated. Equity investments can also strengthen your portfolio by adding diversification. Furthermore, equity investments can offer other benefits such as risk spread, easy transfer, limited liability, and easy monitoring.
What are the risks associated with equity investments?
Just as with any investment options, there are risks with equity investments in addition to the potential benefits. Overall market risks impact equity investments directly, so stock values will rise or fall based on market forces. As a result, you can potentially lose some or all of your investment due to market risk. Other risks with equity investments may include a company’s credit risk, liquidity risk, political risk, foreign currency risk, or inflation risk.
What equity investment options do I have?
There are many ways to invest in equities. These can include buying shares of public or private companies, investing in equity funds, or being compensated in a company’s equity as an employee. Equity investments offer a way of diversifying and mitigating risk, and investors often alter the mix of investments over time as they approach retirement age.
What’s my next step to equity investments in East Tennessee?
As you probably already well know, things are usually far from being black and white when it comes to investing of any kind. But you certainly don’t have to go it alone. Investors who wish to buy into an equity fund usually employ the help of an experienced financial advisor to help. Miser Wealth Partners has the experience to help through every step of the process involving equity investments. To learn more about equity investments and why they might be a good option for you, just give us a call at (865) 281-1616 or click here to schedule a time to talk with us. We look forward to helping you on your financial journey.