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Basic Investment Concepts |
Written by Melanie C
Monday, 23 June 2008
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Diversification is a basic investment concept that is all-important. Basically, it means that you have shares in a wide variety of sectors, types and geographical locations so that if one falls in value the others offset the loss. Having wide diversification significantly reduces risk of loss. Better still, the risk reduction does not mean there is an equal reduction in returns as one might suppose to be the case. Indexes are how shares are grouped into categories. The All Ordinaries Index is often heard mentioned on the news due to the fact that it is a reflector of current market trends. In other words what the All Ordinaries Index indicates is how the share market is responding to the state of the economy. To find out the top 200 shares on the ASX, you need to access the ASX200 Index. Others are as diverse as the healthcare index, consumer staples index, mining and technology to name just a few. Most investors love dividends. These are paid to the investor from the profit made by the company in which they invested as a form or reward for the investment. After all, it's the investors' money that has helped the company to grow. Better still dividends attract a special tax concession in the form of franking credits, because the company has paid the tax on this money. Article Source: http://www.ArticleBlast.com |
About The Author:
Read more about managed investment funds and self managed super funds on the RaboPlus website (http://www.raboplus.com.au).
Read more about managed investment funds and self managed super funds on the RaboPlus website (http://www.raboplus.com.au).
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