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Newsletter

2017 5th Edition (Other Editions)

INDIVIDUAL COMMON STOCKS

Of all the investment alternatives available, no investment gets more public attention than common stock. People from all walks of life watch the market's ups and downs with emotional concern and enthusiasm. The market is sometimes considered a barometer for the mood of the economy.


MEDIA ATTENTION

The news media consistently use the Hang Seng Index, Dow Jones Industrial Average, the NASDAQ composite or the S&P 500 as an indicator of business health. One reason is that the raw numbers do not require in-depth explanations. Reporting market fluctuations this way is suitable for "sound-bite" reporting.


WHAT STOCK PRICES TRULY INDICATE

Stock or equity investments represent the right to be a stockholder or owner in a corporation. As a business becomes incorporated, it sells shares to investors who can be private or public. We are most aware of public investing through the secondary market that operates the stock exchanges such as the Hong Kong Stock Exchange and the New York Stock Exchange.

The equity market is available to every type of investor willing to assume some level of risk. You can be an active trader, a long term capital gain investor or a conservative investor looking for dividends and growth to offset inflation. 


FLUCTUATIONS, RISKS AND OPPORTUNITIES

We have seen bull markets (periods of rising stock prices) and bear markets (declining prices). Although the Great Depression is still fixed some people's memories, the market still holds broad appeal to young and old alike. 

However, before investing in the market, an investor should have provided for a home, savings reserve, adequate life insurance and enough sources of income to cover the basic needs and wants in life, and only then develop a common stock investment program. 


INVESTOR OBJECTIVES

The market for individual common stocks offers varying opportunity to realize investor's goals. The following objectives are shown with generally perceived evaluations of the suitability of common stock investment to meet the goals: 

Capital Appreciation 
Fair to excellent depending on the economy and psychology of the marketplace

Income 
Poor to good depending on price versus dividend or yield factor. 

Stability 
Fair. Markets can be volatile. 

Liquidity 
Good. Most stocks are traded in a routine manner on a daily basis.


INVESTOR RISKS


Stock shares can be bought with minimum expense, but there are always sales charges for buying and selling. Stocks give an investor great leverage and can be used as collateral. Time and expertise in stock selection is needed in order to match the stock with the goals and objectives of the investor.