Financial markets provide their participants with the greatest
favorable conditions for the purchase/sale of financial assets
instruments inside. Its main functions are:
guaranteeing liquidity, forming asset prices within
establishment of proposition and demand and decrease of
operating expenses, incurred by the participants of
The market.
Financial market that includes a variety of instruments, hence its
the operation depends entirely on the instruments that are possessed. As usual,
can be classified according to the type of financial institution
instruments and in accordance with the terms of the instruments
paying.
From the point of view of the different types of sustained instruments
The market can be divided into that of promissory notes and that of
the stock market (stock market). The first contains
promissory notes with the right for their owners to obtain
some fixed amount of money in the future and is called
promissory notes market, while the latter forces the
issuer to pay a certain amount of money in accordance with the
return received after paying off all notes
and it’s called the stock market. There are also types of
values that refer to both categories, such as
preferred stock and converted bonds. they are also called
instruments with fixed yield.
Another classification is due to the payment terms of
implements. These are: highly liquid asset market
(money market) and capital market. The first refers
to the short-term promissory note market with assets
Age up to 12 months. The second refers to the market for
long-term notes with instruments that exceed the age
12 months. This classification can refer to the link
market just because its instruments have a fixed maturity date,
while the stock market is not.
Now we are turning to the stock market.
As mentioned above, purchasers of common shares
usually invest their funds in the issuing company and
become their owners. Its weight in the manufacturing process.
decisions in the company depends on the number of shares
he/she owns. Due to the financial experience of the
company, its market share, and potential future actions
can be divided into several groups.
1. blue chips
Stocks of large companies with a long track record of earnings
growth, annual return of more than $4 billion, large cap
and the constancy in the payment of dividends are called
blue chips.
2. Growth stocks
The shares of said company grow faster; their managers usually
continue with the policy of reinvesting income in
development and modernization of the company. Thesis
companies rarely pay dividends and if they do
dividends are minimal compared to other companies.
3.Inventory receipts
Income stocks are the stocks of companies with high and
stable earnings that pay high dividends to shareholders.
Stocks of such companies often use mutual funds in the
Plans for middle-aged and older people.
4. Defensive actions
These are the stocks whose prices remain stable when the
market downturns, do well during downturns, and are able to
minimize risks. They work perfect when the market changes
bitter and are in requisition during the economic boom.
These categories are widespread in investment funds, so for
A better understanding of the investment process is helpful in maintaining
Consider this division.
Shares can be issued both within the country and abroad. In
If a company wants to issue its shares abroad, it can use
American Depository Receipts (ADRs). ADRs are generally issued
by American banks and point to the right of shareholders to
owning the shares of a foreign company under the asset
management of a bank Each ADR signal of one or more shares
possession.
When trading stocks, in addition to the buy/sell ratio
earnings, you can also receive quarterly dividends. They
depends on: type of action, financial status of the company,
category of actions, etc.
Common shares do not guarantee the payment of dividends.
The dividends of a company depend on its profitability and spare parts
money. Dividends differ from each other in the way they should be
paid in a different period of time, with the possibility of
be taller as shorter. There are periods when
companies do not pay dividends at all, especially when a company
is in financial difficulty or in case the executives decide
reinvests the income in the development of the business. Weather
calculate acceptable stock price, dividends are the key
factor.
The price of the common stock is determined by three main factors:
annual dividend rate, dividend growth rate, and discount
omitted. The latter is also called the required entry rate. Tea
The company with the high risk level is expected to have a high
required entry fee. The more cash flow, the more participation
prices and vs. This interdependence determines the assets
worth. Next we will refer to the division of stock prices.
estimating in three possible cases in regards to dividends.
When buying shares, apart from risks and dividends
analysis, it is absolutely important to examine the company
carefully regarding your profit and loss accounting, balance sheet, cash
flows, distribution of profits among its shareholders,
salaries of managers and executives, etc. Only when you’re sure
of all the ins and outs of a company, you can easily buy gold
Sell shares. If you are not sure about the information,
it is more advisable not to have shares for a long time
(especially before the publication of financial accounting).