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Investing may seem complicated but with the right knowledge, it immediately becomes easier.

All about investing

Investing, a wise choice?

Investing involves risk. But taking risks often goes hand in hand with high potential returns. Read our article and discover the main reasons to start investing.

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Investment risks

Investing involves risk. Find out what you need to know before you start investing in order to limit your risks as much as possible.

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Misconceptions about investing

Investing can make you a little nervous. In this article, we debunk some of the big myths about investing.

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Some definitions :

Actions

Equities, also known as shares, are financial assets that represent a part of a company’s capital. By buying shares, you enable a company to launch its activities or to finance its expansion.

When investors buy shares, they become shareholders, conferring on them joint ownership rights in a company. This means that when the company is doing well, they can share in the profits, but if the company is not doing so well, they may also sustain losses.

If the company earns a profit, it may decide to distribute all or part of this to its shareholders. The shareholders then receive dividends.

Equities are a risky investment. Their value is constantly changing. You never know in advance how much you will earn when you sell them.

Mutual funds

Most funds are UCIs: “Undertakings for Collective Investment”. Each UCI may be considered as a company whose objective is to pool the savings of multiple investors in a large pot, which the fund invests. The most common UCIs are what are known as SICAVs: investment companies with variable capital. The total amount available to these funds for investment varies. The more people invest in the fund, the more money the fund has to invest, and vice versa. Investments made by funds are carried out by fund managers based on previously defined strategy and conditions. They may invest in:
 
– Equities
– Bonds
– Real estate via certificates
– Liquidities  

There is a wide range and diversity of investment funds.

ETF (Tracker)

A tracker is an investment instrument whose objective is to reproduce the performance of a market index, a basket of equities, bonds or currencies or a commodity, for example.

Like investment funds, trackers give you access, via a single transaction, to an extensive portfolio.

Like equities, trackers are listed on the stock market and are continuously traded there.

Bonds

When you buy a bond, you lend money to a company or to public authorities for a defined period. In exchange for your money, the company or the public authorities pay you interest. Upon maturity, the money you lent is repaid.

 

The issue of a bond, like bank credits or equity issues, provides companies with the capital needed to grow.

 

Most bonds have a fixed term, or maturity. You know exactly when you will get your money back.

 

Source: Wikifin

Everything about orders

Ready to invest with MeDirect? Find out how to place an order, which order types are available and how to set the order duration via our educational page.

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Past performances aren’t a guarantee of future returns. MeDirect does not provide investment advice.