What are the benefits of investing in stocks?
Benefits of "ordinary office workers" investing in stocks
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Some may say, "I don't have the money to start investing in stocks."
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investment(FinallyBritish: investment) Is mainlyEconomyIn the futurecapitalRefers to activities that invest current capital to increase (capacity) (in modern times, this does not include commercial activities that do not increase production capacity).In a broad sense, it is also used in self-improvement and relationships.
Uncertainty in any form of investmentrisk) Is accompanied.In general, the higher the expected rate of return on an investment, the higher the uncertainty.If a transaction that violates this general rule is possibleArbitrageWill occur, resulting in a decrease in the rate of return or an increase in risk.
Investment in finance
Investment in finance is to invest financial capital in risky investment targets through economic and management activities.There are various types of investment assets to invest in, with different risk and return profiles.Investment is required because the economy or management entity can invest in larger investment opportunities by raising additional capital in addition to equity capital.By reducing investment opportunities with low return on investment and focusing on higher return on investment, the return on investment of the economy as a whole grows faster, which in turn grows the total financial capital of society as a whole.This serves as the cornerstone of a cycle of sustainable reproduction of investable financial capital.
For example, in the case of securities (stocks, bonds, etc.) investment, if a company makes a profit by expanding factories, strengthening sales channels, strengthening research and development, acquiring companies, etc. with the funds provided, the risk A certain percentage of the profits obtained as a result of the above are usually returned to investors who have taken the risk of the initial capital contribution as capital gains and dividends due to the increase in corporate value.In the case of stocks, there is great uncertainty about the amount that will be returned in the future.It can be negative from big profits.In the case of bonds, it is often promised that a certain amount of interest will be returned.
Investing in real estate is also considered an investment because it poses a risk to investors if they expect to make a profit from the use of purchased assets in terms of capital gains or rent yields and the cost of procuring rental assets.
In addition, short-term news flows rather than long-term returns based on investment decisions on fundamental values created by fundamentals, such as capital gains and dividends created by medium- to long-term trends in structural profitability of the industries and businesses to be invested. Make price judgments in the near future from the direction of price formation materials and anticipate returns due to price fluctuationsriskStrictly speaking, the activities to take are separated from investment.SpeculationCall.
On the other hand, the act on the target whose total return of the trading entity is always 0 or negativegamblingIs called.As an exampleLottery,Public competition,pachinkoAnd so on.However, of the investmentStock trading,Futures tradingFor investments with a strong speculative character such asMoney gameIt is sometimes said that it is included in gambling in a broad sense.
- Value is formed based on the company's future (dividendable) profits and cash flows.In the case of public stocks, the transaction price in the market fluctuates depending on supply and demand factors, market sentiment, and the financial market environment including interest rates.
- Value is formed by the future interest / principal solvency of a company or other bond-issuing economic entity, financial market conditions such as the yield curve, and inflation trends.In the actual market, transaction prices fluctuate reflecting changes in expectations for these conditions, supply and demand trends, and liquidity.
- Commodities reflect each unique supply and demand trend.Gold is a special investment target, and it has a unique price formation that does not depend only on the actual supply and demand.
- Real estate
- land,Apartment,ApartmentSuch.Real capital with strong peculiarity.
- Financial derivatives(Derivative)
- Investing in assets derived from more basic assets and commodities.
- Virtually bilateral short-term interest investment.
Investment in economics
For example,Capital investment,public investmentHayaSocial capitalTo increase the productivity of the economy.また同時に生産設備などの投資財（財を生み出すための財）を需要することでもあり、合わせてAt the same time, it also demands investment goods (goods for producing goods) such as production equipment.Multiplier effectIt also has the effect of expanding demand by (investment multiplier).In other words, investment increases supply capacity and at the same time increases demand (investment duality).Closed economyIn, this balance of supply and demand is difficult due to the harsh conditions of walking on a "knife blade" (proposed by Harrod).
Investment, consumption and capital
Consider the following case.
- At first Mr. A has $ 100. Mr. B borrows $ 100 from Mr. A. Mr. C, who received an order from Mr. B, will produce $ 100 worth of consumer goods. Mr. B consumes the consumer goods he bought. Mr. C uses this cash as savings.After a series of activities, Mr. A's $ 100 debt, Mr. B's $ 100 debt, and Mr. C's $ 100 savings, the total capital stock of the entire economy remains the same as the original economy.
- At first Mr. A has $ 100. Mr. B borrows $ 100 from Mr. A. Mr. C, who received an order from Mr. B, will produce $ 100 worth of investment goods. Mr. B buys this investment good (factory / machine). Mr. C uses the cash he receives as savings.After a series of activities, Mr. A's $ 100 bond, Mr. B's $ 100 debt and $ 100 factory / machinery, and Mr. C's $ 100 savings will initially bring the total capital stock of the entire economy to total. Compared to that, it has increased by 100 dollars (for factories and machinery).
In this way, investment activities not only increase the transaction volume (flow) of the produced goods, but also accumulate capital (stock) in the economy to increase the goods, even when an equal amount of money circulates.
In addition, this investment has reduced consumption and saved money, and saving the economy as a whole is important in that sense.
Investment and interest rate
In general,interestrate(interest rate) Decreases, investment increases.In an environment where the rate of decline in future investment profitability is kept lower than the rate of decline in interest rates, it is expected that the rate of return (marginal efficiency of investment) will be low by raising funds at low cost due to the decline in interest rates. This is because the expectation that the profitability of making such an investment will improve is generally formed.In addition, in an environment where the impact of expectations on future investment profitability due to increased economic uncertainty that leads to inflation remains below a certain level, the real interest rate may decline due to the rise in the expected price rate. It becomes an expansion factor.
It is considered that the central bank, which is a money issuer, can induce the interest rate to a certain extent by manipulating the relative money supply to the currencies of other countries as long as the market price of money stays within a certain range. ing.As a result, there may be options to implement monetary policy aimed at stable economic development, such as encouraging private investment and curbing price increases.On the other hand, the nominal interest rate has historically usually been positive, so if the low nominal interest rate continues, the degree of freedom and marginal impact of such interest rate policy will decrease.
Investment and profit rate
In Keynes, investment is said to be made until the rate of profit (marginal efficiency of capital) expected for additional investment matches the rate of interest.
Productivity and investment
ProductivityInvesting to raise money is not just about physical capitalHuman capitalIt is also done for.将来自分の利益になるようにお金をかけるSpending money for your own benefit in the futureEducation investmentIs an example.In addition, investment in education for children is a special investment in which the beneficiaries and bearers are different.Others include investment in technology development.
The history of investment is the history of risk and expectation.
|1700 BC||Code of HammurabiGave a legal framework for the means of pledged collateral.It legislated debit and credit rights with respect to mortgage land and penalized those who violated their financial obligations.|
|18st century||Chief retainer of the Edo ShogunateTanumaInvested in Nitta development to increase productivity.|
|Early 19th century||Rothschild family TheBattle of WaterlooUtilizing information in, made a huge profit in financial investment.|
|After the mid-19th century||Against the backdrop of the rising nations in the United StatesTranscontinental railroadThere was a construction boom.This caused the United States to record a current account deficit.After that, the railway company was reorganized, but it had the effect of strongly connecting the east and west banks.|
|Late 19 century||Japan isSchool systemStarted to spread primary education.In a blink of an eye, an educational network covering the whole country was created, which greatly contributed to catching up with the great powers.|
|Early 20th century||The great powers actively built battleships to maintain and expand their command of the sea.|
AmericaThen, when the investor suffers damage due to false informationSecurities and Exchange Commission(SEC) Was the main cause of the damageCompany,Securities companyHas the authority to order compensation for (a system that relieves individuals in order from the smallest investment amount).
Establishing an investment company in JapanbankruptcyThere are cases where the investment is repeated, and a large amount of investment collected from about 100 investors nationwide cannot be repaid.出資者が経緯を知らされていないケースが多いためであるとされており、法整備の必要性が指摘されているIt is said that this is because there are many cases where the investor is not informed of the circumstances, and the need for legislation has been pointed out..
Japan scheduled to be revised in 2022Course of StudyThen.high school OfHome economicsIn the class, it is stipulated to touch the viewpoint of "asset formation", and while teaching the characteristics of basic financial products such as stocks, bonds, investment trusts, etc., investment that also goes into the importance of asset formation for the future Education is to be introduced.
- ^ British: capital formation
- ^ Bankruptcy of an investment company ... A man in Osaka Yomiuri Shimbun 2015th of February 5
- ^ ""Investment Trust" class in high school home economics from April 22". Nihon Keizai Shimbun (September 2019, 11). 2021th of February 1Browse.
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