• Equities-revenue calculator

• Full guidance on equity investments

What is stock investment?

Equities investment refers to the way in which the company ' s growth gains are shared by buying shares of the company listed as shareholders in the company. Equities can be financed from capital gains from rising equity prices, as well as from cash gains such as corporate dividends. Equities are a relatively high investment type with relatively high risk and return.

Earnings from equity investments

• Capital gains: The gains realized through the rise in equity prices are the most important source of income for equity investments. The profit is derived from the low price of the sale.
• Red-centre gains: The listed company distributes profits to shareholders, usually in the form of cash dividends. Red is a relatively stable cash flow.
• Equity incentives: Some companies have increased the number of shareholders by distributing new shares or making them available to shareholders.

Costs in stock transactions

Trading commission: It is the securities firm that charges transaction costs, both in the direction of the sale and sale. The minimum commission is usually $5, with a rate of 0.025 per cent (which can be negotiated with the voucher). In order to reduce costs, investors should choose lower commissions.

Stamp tax: It is a national tax, which is collected only when sold. The current rate is 0.05 per cent (as adjusted in August 2023). This is an unavoidable cost that needs to be fully taken into account in the calculation of the proceeds.

Transfer of funds: For registration and transfer, the Chinese settlement is collected. The tax rate is 0.001 per cent of the amount of the transaction. This is a small cost, but it is also necessary to calculate the long-term investment.

Importance of average cost

The average cost is the average cost of holding stock, including the price of the shares and all related costs. Accurate calculation of the average cost price would help set reasonable selling price targets. If the average cost is $15, the 10 per cent profit would require a sales price of at least $16.5.

Meaning and calculation of the rate of return

The rate of return, which represents the percentage of return on investment as a percentage of the initial investment, is an important indicator of investment efficiency. Equities yield = (Sale total income - buy total cost) / buy total cost x 100%。 It should be noted, however, that this rate of return does not take into account the duration of the investment and should be assessed in conjunction with the investment cycle.

Factors affecting return on equity investment

• Unit selection capacity: The choice of a better-growing company is the basis for profit. Basic and technical analysis is important.
• Time to go: The sale of low-level purchases and high-level sales can significantly increase returns. But market timing is difficult to grasp, and siloing is a more realistic strategy.
• Warehousing period: Long-term investments are usually more stable than short-term transactions. Intensified transactions can increase costs.
• Risk tolerance: Stock prices fluctuated and required adequate psychological construction and financial reserves.
• Cost: Transaction costs are not negligible, and low commission and fewer transactions can reduce costs.

Risk management of equity investments

• Diversification: Not all funds should be invested in a single stock, and should be spread across a wide range of industries and companies.
• Set stoppage: Set the maximum percentage of the loss to be sustained in advance and the target must be met firmly.
• Periodically repeat: The portfolio is reviewed regularly to check if it is not intended to be and to adjust the strategy in a timely manner.
• Learning accumulation: Continuous learning to invest in knowledge and improve analytical capabilities to avoid blindness.
• Cash holdings: No investment is required and a portion of the cash is retained for contingencies.

Avoid common investment errors

• # And I'm gonna be # Buying or selling blindly is often done at higher points and at lower points.
• Overtrading: Frequent transactions can significantly increase costs and instead reduce net gains.
• Neglect costs: Small costs are also significant in large transactions, and low-cost coupons should be chosen.
• Centralized investments: All funds are invested in single hotspot stocks, and if lost, they are in serious losses.
• Financing stocks: The financing magnifies the gains and the risks and the risks of being easily explosive.

How to become a better investor

Successful equity investments require a combination of knowledge, experience and discipline. Maintain basic analysis and understanding of the business and competitiveness of the investing firms. Establish clear investment plans and rules for cessation of losses, not be emotional. Regular learning, both in terms of success and failure. It is of paramount importance to have a long-term vision and not be constrained by short-term fluctuations.