financial awareness

we were in discussion about stock market investment.

we have cover the basic things like real state, gold and other commodity products .

we do not go to discuss how we can do buy the stock of fmcg products, it sector, currency investment and other.

first we have to understand the category of investments and risk management before entering into the actual investment.

globally we can classify the investment in three parts;

1. high risk high reward
2. medium risk medium return.
3. low risk minimum return.

high risk means company which are in very early stage and do not prove its noteworthy in past as it is very new company.

idea and vision looks very promising it is likely to possible that they can achieve what they believe if so there is a bigger growth headroom.

but there is also a high possibility of failure leading to heavy capital loss.

medium risk and medium return are stock of those company which is already there for 1 decade or 2 but have not seen any generation turn around may be there next successor is good and takes company to new height or may be they are not good enough to retain there legacy.

chances of happening both things are in moderation and if positive things happen though we do not expect a big turn around or vice versa.

minimum risk and minimum return stock are of those company which have become already giant in the market and have present there generation after generation .

there is very less chances these company will shut down in future in next one generation.

but there is also very less chance for bigger growth as they are already in optimal stage.

in next column we discuss regarding the portfolio diversification .