One of the ways to increase your wealth (that is, financial condition) is to invest part of it in order to profit. To date, many tools of this process are known, and one of the most popular is mutual funds. They are created for the competent financial management of cash resources and are able to bring considerable benefits to their investors by several times increasing their investments. This, as many people know, is a collective formation that combines the funds of tens, hundreds and even millions of shareholders into a common fund, which is transferred under the control of the Management Company. It is she who does the main work - invests in securities and other assets, taking part of the profit (commission) to herself, and transferring the rest to the depositors. In order to receive it, you must purchase a share. This is paper (registered), which confirms your right to part of the property of the fund, and therefore, to its profit.
Where did this concept come from? Translated from English, “share” is a part, a “piece of cake,” which absolutely reveals its significance in the financial sphere. You buy a tidbit (invest in a fund), and then reap the benefits of this purchase, making a profit on its value (the amount of your investment). At the same time, its price will constantly change. An investment share is not a fixed value, but a relative one. It can change daily, depending on fluctuations in the value of securities that are part of the asset of the fund. Your part will be determined as a share (in proportion to what% of the total funds you contributed).
In addition to the fact that with the acquisition of a share you get the right to a part of the property of a certain fund and a share of the profit from the sale of its assets, you have other possibilities. For example, you can sell, donate or bequeath an investment share to someone from family members, friends, acquaintances or colleagues. The fact of transfer is confirmed by an extract from the register of the shareholder, which is issued by the registrar.
You can evaluate the work of the fund by how the value of the unit changes. Naturally, if it predominantly increases, the Management Company competently operates the fund’s capital. This is very important, especially in the long run. After all, the owner of a share does not receive any real money while he remains a member of the fund. He will not gain profit (or loss) until he sells it. In this case, the monetary reward from the share is the difference between the funds invested in the fund and those received after its sale.
How to determine how much fund money you currently own? Very simple. Upon the initial deposit of a certain amount, the number of units is recorded on the account of the shareholder, which is calculated by dividing the amount of his investments by the total amount of the fund’s funds (this can also be a fractional number, for example, 542.74 shares). In the case of a sale, this value is multiplied by the value of one share at a given moment in time, which results in the amount of money that you are entitled to.
Thus, a share is a reasonable alternative to deposits and traditional accumulation. With the right choice of a mutual fund and the competent work of its Management Company, you can significantly increase your investment and achieve the desired results by saving up for an apartment, a car, or other goals.