STOCK BUY BACK
A company can buy back its stock at any time when he wants. Companies buy back its share of the market due to some reasons. It defined that after buy back of share the financial ratios are increasing to the left of shareholders. The company purchases its shares from the market at a fixed price and the most probably the market price of shares.
Buy back also called repurchase of shares by the company. Repurchase can define from the start of issuance or can be at any time from the goodness of the company and our major shareholders.
Repurchase can be in two types
• Repurchase against cash
• Repurchase against new share
Whichever scheme adopted from the above the shareholder receive its whole shareholding. Companies have to do this because it sounds good for the company and many times, it is defined policy from the company
People that invest in the companies have savings and investment nature instruments to purchase the shares at market.
The Little difference between investment and saving given below.
INVESTING means, you put your money in any business to make more money. Therefore, we can also say that your money is working for you to make him more and more.
INVESTING is something different from SAVING. Investing is proactive in his nature but on the other side, saving is passive in his nature.
SAVING is focusing on the safety of money and always tries to stay on the safe side in future, in other words you can say SAVING is also an activity to make more money but with not taking a RISK.
In investing, you focus on returns from investment in future in form of cash or cash equivalents. You can also evaluate the return on investment with the desired outcome or the risk, which is associated with the investment.
In saving, you have not to face any risk and have earned some profit after a six periods. Risk is almost not situated with the term saving.
It is a very difficult discussion to explain and to create the difference between investment and saving. This related to each other but investment has some characteristics, which differentiate it from saving. There are many characteristics associated with investment but here we are going to discuss some of them in the context of stock.
The individual has also had a chance to invest in mutual fund companies to secure themselves from negative buy back affect. The main advantages of these companies are in buy back issue is
Mutual funds are a modern way of earning profits from stocks with minimum risk. In mutual funds individual, give his or her money to any investment company who is running the mutual funds investments
Every mutual funding company has a very vast skilled and experienced people, who work in the stock market field for many years.
A mutual fund diversified in many areas of stocks in the stock exchange. Professional buys and sells different stocks to minimize risk of small inventors.