The term 'equity investment' means buying and holding shares of public companies trading on the Mumbai Stock Exchange. By buying the shares, the investor becomes a part of the company. It has a number of advantages, including the right to vote to hire management, share in profits and potential preference for new shares of the same company.

1. Making Money from
Equity Investments

2. • The term 'equity investment' means buying and holding
shares of public companies trading on the Mumbai Stock
Exchange.
• By buying the shares, the investor becomes a part of the
company.
• It has a number of advantages, including the right to vote to
hire management, share in profits and potential preference
for new shares of the same company.
• Equity is one of the few ways to make a lot of money.
• Equity is for individuals or firms looking to play a 'high risk,
high return' game.

3. • This is preferable for investors with relatively high risk
appetite.
• This is because of the risk of losing the entire investment.
• Investing in stocks should be a wise and well-researched
decision.
• The share price is directly related to the performance of the
company.
• As a result, it is important to choose promising companies
that will be consistently profitable, allowing you to grow over
time.

4. • As mentioned earlier, when an investor buys a stock, he or she
becomes the proportional owner of the company based on
the number of shares purchased.
• There are five ways for investors to make a profit from equity
investing:

5. Dividends:
• As an owner, the investor is entitled to a portion of the
company's profits.
• If the company chooses to distribute its profits as dividends,
the investor receives a fixed amount for each share he owns.

6. Capital gain:
• When the market value of a stock rises, the investor benefits
as he or she can make a profit from the sale of the holdings.
• Over a period of several years, the investor can make up to 50
times more than his initial investment.

7. Buyback:
• The Company may announce that it will buy back shares from
its shareholders at a price higher than the market rate.
• Although not every investor wants to sell their shares, the
buyback window allows them to make a profit.

8. Rights issue:
• When issuing new shares, the company may offer discounts to
existing shareholders.
• Profits can be made by buying shares at a lower price and
selling them at a higher market price.

9. Bonus issue:
• If a company performs exceptionally well, it can issue free
shares to its shareholders.
• These extra shares quickly start trading at market prices,
giving investors a better chance of making a profit.
• Visit squareoff.co.in to learn the stock market basics