Bringing balance to your investments

There are just three ways that an investment can make money: by lending to someone who pays interest; by buying shares and thus becoming part owner of a business; or by buying something like gold or real estate, which can be expected to rise in value. Equity Investing When you buy shares in a business, your profits and losses can be large depending on how the business does. Buying shares makes you part owner of a business. Of course, the share is too small for you to have any say in how the business is run, but the financial rewards (on a per-share basis) are the same as any other owner. When the business pays out part of its profits as dividend, then as part owner you get your share. When the business becomes more valuable (the price of its shares increase), then your wealth increases. Like any business owner, you can decide to sell off all or some of your share or keep them for future gains. The future gains could be in the form of dividends or a further increase in the value of shares. Conversely, if the value of the share goes down, you could lose money. If the business starts doing very badly, you could lose a large chu

This article was originally published on September 14, 2020.