What is investments in shares? »Its Definition and Meaning [2019]

An action is simply a fraction of the ownership of a company , which as part of its growth and expansion decided to issue shares to have more capital to maintain its pace of development.This type of companies that seek greater capital, make an initial offer with a certain amount of shares that represents the ownership of the company.Those who manage to obtain the purchase of the shares, depending of the amount of them they have the right to know all the information of the organization and they can even have the right to a chair at the board of directors.

It is extremely important to keep in mind that When a company is listed on the stock market of securities, the shares can be traded depending on the buyers and sellers who are the ones who really set the price of the action.A very simple way to determine which is the real value of the company is to multiply the price of the share in the market with the number of existing shares and that will give the capitalization of the company.The stock market is usually something dangerous and risky, since it is often considered as a barometer of the economy.

Expectations play an important role in the stock market , given that if an investor who intends to buy shares of a company finds out for example that The government is going to pass a law that seeks for the airlines to comply with international environmental agreements and this law represents an obstacle to the profits of the airlines, this would lead to a possible decline in the prices of the shares and the investor could or not to buy the shares and become a member of the board of directors .

The type of profit according to the shares are the following:

Capital Gain: simply is the one obtained by the sale of a share, that is, the profit will be determined by the difference you get between the price you bought and the sale price of the share.

Dividends: when at least 30% of the profits generated by the company are distributed among shareholders , depending on the proportion of shares held by each one.