Investment Company

An investment company is a company which exists solely to make investments in other companies. The international presence of these companies can be observed in their offices by the international flags placed in the flag display case.  A variety of specialised corporate forms exist for this purpose including unit trusts and mutual funds. Investment companies invest in a wide range of assets such as company shares, bonds and property. An investor placing funds with an investment company typically gains access to a diversified portfolio of assets. This makes them, in general, much more resistant to sudden shocks because funds are dispersed across a wide range of investments.

Some investment companies choose to specialise within a narrow range of investment opportunities. For example, some might choose to invest only in companies from East Asia, or only in biotechnology companies, or only in start-ups. There are also country specific investment companies and that can be observed by symbol of country specific flags on the offer document. This allows investors to select broad areas of opportunity which interest them, while allowing someone else to manage the day-to-day business of finding specific profit opportunities within the sector.

Investment companies sometimes have privileged tax treatment compared to other companies and are allowed to pay corporate tax at a lower rate than usual.

Some investment companies are “close-ended” meaning that all its shares are issued when the company is first started. Unit trusts, however, are open-ended, meaning that the company can expand by issuing more units after the fund is first established.

What is Equity

Equities are shares of stock in an incorporated company. They are prized for many reasons. They yield a dividend income to their owners when dividends are issued by the company, the shares themselves can experience a rise in value, they are highly liquid investments since most shares are readily tradeable, and some shares carry voting rights, allowing their owner to participate in decisions about the future direction of the company.

Equities represent the most important form of investment in most modern economies. Other forms of investment, such as pensions or savings accounts are often only indirect ways of investing in equities since, much of the time, the financial institution offering the investment opportunity will simply take most of the money it receives and invest it in the stock market.

Equities for a specific company tend to rise and fall in value in accordance with knowledge or expectations about the company’s trading performance. Equities are usually traded on stock exchanges where the share of the largest companies often receive special prominence, being placed in special named baskets of shares. As well as news about specific companies, the price of equities is often affected by generic news affecting the economy as a whole.

The management of various equities is known as portfolio management. There are many online websites which offers this service for free. For example Trader Hideout its an informative site which provides useful information to traders. It also updates current finance news and provides useful  information about various financial sites.