Why should you even think about investing in equities?
Equity investors buy shares of a company with the hope that those shares will increase in value (in the form of capital gains) or create capital dividends (in the form of capital dividends). If the value of an equity investment increases, the investor will be entitled to the gain in monetary value if they choose to sell their shares or if the company’s assets are liquidated after all of the company’s obligations have been satisfied. By increasing the level of diversification in a portfolio, the addition of equities can be beneficial.
What are some of the possible advantages of making equity investments?
The potential for a gain in the value of the initial amount of money invested is the primary advantage that comes from making an investment in equities. This is accomplished through the receipt of dividends and earnings on investments.
An equity fund often requires a minimum initial investment amount from participants but provides them with access to a varied investing choice.
If an individual investor wished to attain the same level of diversification as an equity fund, it would require significantly more cash input, as well as significantly more human investment.
In the event that a firm wishes to acquire extra cash through the equity markets, investors may also be able to expand their investments through the purchase of rights shares.
Why should an investor choose BlackRock?
BlackRock provides investors with access to a diverse range of equities products, including index funds and factors (offered via iShares® ETFs), as well as active strategies provided via mutual funds and SMAs.
A strong active franchise complements BlackRock’s industry-leading positions in exchange-traded funds (ETFs) and factor investing.
BlackRock provides solutions with prices that are comparable to those offered by competitors across all equity market exposures.
The following are some examples of additional risks that can be associated with stock investments:
Credit risk refers to the possibility that a corporation will be unable to pay its debts.
The possibility that the value of a company would move as a result of changes in the values of several international currencies is known as the foreign currency risk.
A corporation runs the danger of not being able to satisfy its short-term loan obligations when it has liquidity risk.
Political risk is the potential for a company’s returns to be negatively impacted as a result of political shifts or instability in a country.
Economic concentration risk refers to the possibility that a company’s value will decrease because it has too much of its resources invested in a single business, industry, or country (i.e., it has placed all of its eggs in one basket). Should the value of that element decrease, the company will suffer a greater-than-usual amount of harm.
Inflation risk: the value of a firm may decrease if it suffers losses as a result of growing inflation, which dilutes the company’s worth.
