Investing for beginners - Investing in shares
BOTS wants to ensure that everyone in the world has the opportunity to build up a second passive income through investment. Not everyone has experience with investing yet. That is why we are now sharing more information every week in our "Investing for beginners" series.
Investing for beginners
Last time we shared the five best-known ways of investing in our "Investing for beginners" series.
We made a distinction between the following forms of investment:
- Investing in shares
- Investing in bonds
- Investing in real estate
- Investing in funds
- Investing in crypt currency
You can read the whole article back here.
Today we focus on investing in equities for beginners. What is it, what stocks are there and why do people choose to invest in stocks?
Investing in shares
If you buy shares in a company, you become part owner of the company. If the company is doing well, your shares will become worth more and you will sometimes be rewarded for this in the form of a share of the profits. This is called dividend. You can also decide to sell your shares again. Have they become worth more? Then you have earned money. If the company is not doing well, you will not receive a profit distribution. So no dividend. Do you want to get rid of your shares? Then you'll get less in return than what you paid. Everything depends on the success of the company in which you bought your shares.
Types of shares
When buying shares, a distinction is made between two types of shares: regular shares and preference shares.
Regular shares: In a company, regular shares represent voting rights. Shareholders are usually entitled to one vote per share and receive dividends only upon approval of the company's management. These types of shares are the most traded shares on the stock exchange.
Preference shares: Preference shares give the shareholder various additional rights. These rights are also referred to as pre-emptive rights. For example, if you own preference shares, you will always receive a dividend if the other shareholders have not yet received a dividend. You have a certain priority position with regard to dividend but also in case of, for example, bankruptcy.
Why invest in equities?
Roughly speaking, there are two reasons why people start investing in equities. Asset growth and dividend income.
Asset growth: Investors buy stocks with the hope that their investment in value increases in the form of a price increase. Investors may hold the shares for a relatively short term or have a long-term view, but hope to make a profit in both cases.
At BOTS, we believe that you invest for the long term. We wrote about it earlier in this article.
Dividend income: In addition to buying and selling shares to make a profit, investors also buy shares to generate an income stream from dividends. This profit can be paid out or reinvested.
The BOTS app and shares
Our investment focus for now is on crypto funds. And we do this in an automated way. With bots. In our BOTS app, you can choose a particular bot. This bot is developed by specialized developers and works through algorithms, artificial intelligence and machine learning. This eliminates the need to invest via a (digital) fund manager. So you don't pay for the costs they incur to be able to invest for you. In the long run, we do not only want to offer crypto investments, but also shares, bonds and investment funds.
The efficiency that a bot achieves, compared to a human being, is significantly higher. A bot does not sleep and can therefore react directly to changes in your cryptofound. Also, a bot has no emotion that partly determines how your investments are handled.
In this way, investing with higher returns becomes feasible for everyone. The best trading strategies were only available to the richest 3% in the world. Because of our bots now also for you. You can start within 2 minutes and from € 50,-.
Investing is for everyone
Everyone should be able to invest. And now they can. With BOTS. Together we are going to make the world of investment fairer and more transparent. Are you interested, but your question hasn't been answered yet? Take a look at the FAQs on our site. Or contact us, we will be happy to explain it to you in person.
The BOTS app is now live
There is no such thing as risk-free trading. It is possible to lose (part of) your stake.