Investing in securities is a current strategy in business and it tends to guarantee the profit making ventures of an organization. It is the reason that organizations have to trade in securities and since securities are flexible fits, organizations are bound to make profits on the positive side but they can again loose on the negative side. It means that trading in securities requires an amount of effort in predictions and studies on the most probable security to invest in.
There are a number of strategies used in order to invest in securities. These strategies depend on a number of factors that an organization stipulates and highlight in order to ensure it is on the positive side of the business. The stock exchange is a marketplace where the activities of trading stock take place. The market can be a physical place or on a virtual platform. Investors have various means in which they use to invest in securities. These strategies determine the guarantee of investment, the process and the proceeds from the same.
Direct trading is one method in which firms invest on the security exchange. This is done on the floor of the NYSE. Direct trading is also known as the fourth market, this is where the investors visit the NYSE headquarters and trade on the floor for the most probable stocks for their businesses. The practice is indulging since the stocks have to be studied at a closer angle in order to determine its highs and lows in the market. It is the most viable process as long as the business can study the profit levels and the risks involved. The information helps the organization to decide on the best security to invest into.
Investors in securities involve the services of brokerage firms. Brokerage firms are intermediaries that buy and sell securities for organizations or individuals that are able and willing to invest. This method involves handing instructions to the brokerage firm to trade in the securities exchange for profits and at a fee. The brokerage firms provide the security study into the security and any other logistics involved in the venture.
Brokerage services are good since they help the organization to study the market and the probable securities. It means that the organization has a high capacity to make the most profit from the deal since the market highs and lows of the security have been studied. The data from the study helps the firm to analyze the securities in terms of its market behavior in the future and advices the organization on the bests of the said security. The brokerage firm therefore goes ahead to buy and sell the security to the organization.
Placing an order is another strategy that a corporation uses, it gives the brokerage firm instructions to get the highest price on the security for the selling investor. This is to ensure that maximum profits are acquired from the security to the firm. There is a situation when the investing firm is on the buying end. At this stage, the buying organization advises the brokerage firm to place a limit order. This entails the advice by the buying organization not to exceed a certain limit of the price. It means that the firm has a specified amount of money that it wants to buy a security with and therefore specifies the amount.
There is direct investing, which is done by some corporations that encourage investors to buy stock from the corporation. The plan used is called a dividend reinvestment plan, which encourages the investors to increase their amount of investment in the firm by investing back the dividends they earn from their stock. The investors can be encouraged to sign documents to enable the corporation to just direct the dividends to their amount of shares or they can be given so as to invest back. The probable method is to direct the dividends to go to the shares immediately they are earned.
The advantage of using direct investing to buy stock is that the company deals with the process directly. It means that intermediaries are avoided and this is important in ensuring the safety of the process. There are times when brokerage firms are unethical and give the wrong advice to the particular investor. Then there is the brokerage fee which is also avoided. Therefore the investor gets full benefits from the process when it gets successful.
The use of brokers in buying securities is the most profitable since most of the services are done by the broker firms. At a fee, the services of studying the market and the particular securities are done in order to identify the profitable securities and realize the risks involved in the venture. The type of brokerage services differs by the business and the fee to be applied. There are brokers that do full services and those that do limited services. The fee charged depends on the magnitude of work done.
Economics is not just about money. At a closer scrutiny, economics is the observation of the involvements done by individuals to allocate scarce resources. It is pushed by the forces of supply and demand. It shows that people work in order to control the supply quantity according to the amount and rate of demand. It means that if the economics of a place are studied, then the particular place and the people are bound to improve their living standards. It is all about realizing what is required in a particular market and supplying at a certain fee.
Governments and people that lay important economic strategies find prowess in the venture and get higher returns in terms of money and even other resources like infrastructure. The importance of the economy is realized in competitive environments. Economics tend to provide obligations and jobs, this is why corporate bodies employ financial managers as well as economic strategies.
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Weil, D. (2016, 2016 24). 6 common investment strategies of fund managers. Retrieved from Bank Rate: http://www.bankrate.com/finance/investing/common-investment-strategies-of-fund-managers-1.aspx