It's time for your money to start working for you!
Working for money is out of fashion. Being happy is in! The new generations understand the importance of a more balanced life and having a less futile purpose. Although we have more realistic expectations and more reasonable goals, we still need an income, because we still have bills to pay. But we can count on our own money to help us with these commitments over time.
It is much easier to have money when you have money, so we have to plan ahead. Money can work for us, and when well invested, it provides excellent returns (especially in Brazil). On the other hand, if poorly invested, it is a waste. It doesn't matter if you have a lot or a little, if your ambitions are big or small, everyone needs to understand how to taiwan whatsapp data manage money and how to invest wisely. The financial market is not a seven-headed monster. Learn the basics and know how to judge who advises you on a daily basis. Learn a lot, and have a career with promising potential.
But where to start?
The Capital Market brings together those who have surplus capital (savings and willingness to invest – investor) and those who need capital (opportunities and businesses where capital can be invested – enterprise). Note that the investor finances the enterprise directly, without the intermediation of other agents such as banks or agents (who normally charge a fee or risk spread).
The Capital Market can be variable income (share instruments) or fixed income (debt instruments). In other words, the investor can buy shares in the enterprise, or can buy debt from the enterprise. Be aware that BOTH HAVE RISK, as both depend on the enterprise, but every debt instrument has less risk than a share instrument, as the debt always receives before the shareholder. It's that simple.
When we talk about the equity capital market , we think of BOVESPA, the São Paulo Stock Exchange. In simple terms, everything that is traded on BOVESPA is part of the equity capital market , therefore shares, units, subscription bonuses, any equity derivative, etc. More recently, there are even investment fund quotas being traded on the stock exchange (this market is huge in the US) called ETFs ( Exchange Traded Funds ).
The debt capital market includes debentures (Brazilian market), bonds (in the international market), promissory notes, financial bills, credit instruments involving receivables such as CRIs, CRAs, FIIs, FIDCs. There are also government bonds…
How to invest?
Why would someone buy a share of OGX for 30 cents? Because this investor believes he can sell it for 40 cents (and therefore make money, in this case, 10/30 = 33% – not bad!!). We need to separate those who invest in the short term, with a speculative profile, from those who invest in the medium/long term, with a fundamentalist profile. Let's focus on the fundamentalist profile.
Investing in stocks involves understanding the company. We use the information available to date to assess the company's future expectations, its market positioning, its ability to generate cash and profitability. The main analyses we perform are financial statement analyses, multiple analyses and, occasionally, economic and financial projections. The objective is to assess whether the stock price is expensive or cheap, whether we should buy and when we should sell.
Investing in debt involves assessing the credit risk of the venture. This analysis is generally easier because we have to assess whether the venture will be able to honor its commitments (analyses of financial statements and a simplified analysis of economic and financial projections) and whether the debt is expensive or cheap (benchmark assessment). Perhaps the greatest risk of a fixed income investment is the fluctuation of the market interest rate when the interest rate is not variable and the investor cannot stay in the asset until maturity.
What to do?
First, invest in yourself. Demystifying these concepts is very simple, and everyone needs to know a little about finance, regardless of their specialty or field of activity. Be your own financial manager .
If you want to bet on the interest rate, invest in debt with a pre-fixed interest rate, most already price the trend.