Direct Equity
What is Direct Equity?
You not only get a huge profit potential to beat the inflation but also own a diversified investment portfolio. By choosing a right share at the right time, you own a part of the company.
Rules for Direct Equity Investments
Choose Right Companies
It is important for an investor to select the right companies. This means selecting a company that offers good growth opportunities. A company that has strong business fundamentals has good stocks to buy for the long term. You get indirect benefits when the company makes any profit over time by way of an increase in your share’s value.
Invest @ Right Time
Buying and selling stocks at the right time is most important. That right time is when stocks are trading at undervalued price levels. In the short term, the stock market is driven by speculation. But in the long term the company’s fundamentals overshadow speculative forces. It is advisable to buy when others are selling and sell when others are buying.
Benefits Direct Equity
Profit Potential
Though you can get a low current interest rate, the profit potential is really higher in direct equity than any other investments.
Tax Benefits
If you get a larger yield on equity shares from an increase in capital gains, the taxes are charged at lower rates.
Investment Value
Shareholders of any company will get benefits as appreciation in the value of the investment and yearly dividends.
Liquid Nature
The main advantage of direct equity is its liquid nature which can be sold with ease in the capital market.
Beat Inflation
The equity shares offer an excellent hedge against the ever increasing inflation and safeguard your purchasing power.
Internal Control
Shareholders of the company get the right to control the management of the organization in the way they want.
