Why should you invest in the Equity
In the current scenario, investing in
both equity and forex can be quite profitable. But before you can reap huge
financial gains you need to understand the basics of both equity and forex
trading. If you can play your cards properly in the equity market, or invest
cleverly in companies, which can give high returns, then the equity market will
generate sustainable profit against your investment.
Difference between the Equity and Forex
When planning to invest
in the forex market, the trader must know or understand the basics of
intraday or day trading. Because currency exchange rates can vary throughout
the day, and a clear understanding of the exchange rates of different
currencies against the Euro or Dollar is essential. Currency
trading is dependent on volatility; a fast price change can make or
break your investment.
Only high-risk traders rely on forex
trading and small investors rely on long-term and less risky investments. Such
investors tend to invest in the equity market or stocks. If an investor wants
to invest a part of his income by buying stocks of different companies, he or
she needs to study the company's financial history, its current status and how
it is expected to perform with its future investments. Keeping these in mind,
an investor a can make highly profitable long-term investments.
Equity pays long-term dividends
Investing in big blue chip companies or
well-heeled companies can bring you year-end dividends. When the company makes
a profit, the company may reinvest some amount of the profit in the business
itself and some part of the profit is distributed amongst its investors or
shareholders. This way the company retain its long-time shareholders. The
dividends for large shareholders can be quite profitable as they are
distributed by the proportion of equity an investor is holding in the company.
Dividends or over-night dividends are
also applicable for forex trading, where an
overnight interest rate is applied, for holding a few specific currencies. The
rates vary according to different currencies, but for a long time investor,
this option is not that viable. The trader needs to fathom the high volatility
of the forex & the dynamics of the money market.
Equity market for long-term investors
For long-term investors and day-to-day
traders, both the equity market and online forex market
can bring in profits, if investments are made judiciously, but for low-risk
individuals who prefer to invest occasionally, investing in company stocks or
equity would be a better choice as forex trading can change due to multiple
reasons, including socio-political reasons.