Stocks

/ For Private Clients / Securities /

Equity investment is the most lucrative type of investment on the stock exchange. World history shows that equities are the only type of investments that consistently exceed the inflation rate. Thus, people who invested their savings in the stocks of Ukrainian companies earned on the average 41.33% in 2006, 135.34% in 2007 and 36.42% in 2009.

In 2008, owing to the escalation of the global financial crisis that began in autumn 2007 in the U.S. mortgage sector, Ukraine's stock market fell by 74.33%, that is, almost by a factor of four. This creates excellent opportunities for the investor to gain on the market's growth by investing today.

Investing in stocks, you become a co-owner of a company. This means that the market value of stocks reflects the market value of the company. And although the issuer (of the stocks) doesn't earn additional capital from the rising value of stocks (because they only make money during the initial public offering), it is nevertheless interested in the growth of market quotes as an indicator of its business attractiveness.

The main reasons for buying stocks are:

• Low initial investment amount - you don't need a significant sum of money to become an investor;
• Equity investment is the most liquid type of investment, that is, you can always withdraw your money;
• The market value of stocks grow when there is positive company news, while on the other hand you don't risk all of your money should a company's solvency level worsen for a certain period of time;
• The price behavior of stocks are forecasted using fundamental and technical analysis based on sound research;
• You can count on receiving dividends when holding shares of successful companies. The practice of regularly paying dividends is a chief characteristic of state-owned companies but is gradually catching on in the private sector.

Taking a balanced and well-thought approach toward the risks involved, investment in stocks outweighs the risks when compared to potential earnings.