Stock Broker Salary
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All these goals can be realized through excellent financial planning. An intelligent plan entails investing your money in an appropriate combination of assets with potential to generate the income needed to achieve your goals. If you invest wisely, you can maximize the earning on your investments. There are many investment avenues available, but a wise investor does not invest on impulse, a hot tip or follow the herd.
An investor should discriminate between information, casting away irrelevant and illogical pieces of information, and checking for opportunities and facts before making an intelligent choice of investments. If you decide to sell your shares you will need to deliver share certificates to the broker in time for the transaction to be completed.
Electronic book-entry transfer of securities i. CDS has been set up to eliminate physical transfer of securities. This new book-entry system is in line with the international practice and has replaced the manual system of physical handling and settlement of shares at stock exchanges.
With in the CDS, transfer of shares from one client account to another takes place electronically. The CDS is managed by the Central Depository Company of Pakistan Limited, which has been sponsored by the stock exchanges and leading local and financial institutions.
Presently, 97 percent of settlements are routed through CDS. Investor Account Services have been introduced in order to facilitate individual investors to maintain their account directly with the CDC. With the implementation of CDS and automated trading system, trading and settlement of securities have become transparent and efficient.
Stock brokerage costs vary according to the extent of services you avail. You should select the service that meets your needs and requirements. Before you start dealing in shares, determine how much you to pay stockbrokers for their services. You need to shop around for the right service at the right price. Charges will differ depending on whether you wish to invest directly or indirectly. Ask if there are any ongoing costs of stockbrokers, other than the dealing commission each time you buy or sell.
There are several types of shareholders: A daily indicator of share price movements is available in many newspapers and also on website of the relevant stock exchange. Informative articles about many companies are regularly published in newspapers and investment magazines. Your stockbroker may also provide valuable information.
Some publish newsletters for their clients, reflecting their views on the performance of selected companies. Annual reports of companies also contain useful information.
Some companies have shareholder relations departments, which can help with factual information. You should always ensure that the stockbroker you choose is licensed by the Securities and Exchange Commission of Pakistan SEC to trade. Prefer stock brokerage firms with good track record.
As a shrewd investor, you should know your rights and responsibilities and should beware of the rules that govern your investments as well as the legal recourse available, in case things go wrong. You can report abuse to the SEC, whose mission is to ensure the development of a fair, efficient, and transparent securities and futures market.
Although its main function is regulatory in nature, the SEC has the ultimate responsibility to protect the investor through market supervision and ensuring that its laws and regulations are complied with. Stock exchanges are the frontline regulators; they must play a proactive role. All data is provided for information only. LSE is not responsible for any error in data and losses resulting from business or investment made on the information provided.
Best viewed at resolution X The stock exchange provides a market place where shares can be bought and sold. What is the Role of the Stock Exchange? The stock exchange admits companies for trading at their securities. It provides a market for raising capital by companies. It provides a market place for shares of listed public companies to be bought and sold, by bringing companies and investors together at one place.
The exchange's role is to monitor the market to ensure that it is working efficiently, fairly and transparently. Stock Exchanges in Pakistan: There are three stock exchanges in Pakistan: Karachi Stock Exchange Guarantee Ltd. Lahore Stock Exchange Guarantee Ltd. Islamabad Stock Exchange Guarantee Ltd. Of these, Karachi Stock Exchange is the biggest exchange in the country. The stock exchanges have introduced a computerized trading system to provide a fair, transparent, efficient and cost effective market mechanism to facilitate the investors.
The trading system comprises of four distinct segments, which are: It reduces the time between execution and settlement of trades, which in turn reduces the market risk.
It reduces settlement risk, as the settlement cycle is shorter. The shares of companies, which make a minimum public offering of Rs. Spot transactions imply delivery upon payment. Normally in spot transactions the trade is settled within 24 hours. A Futures contract involves purchase and sale of a financial or tangible asset at some future date, at a price fixed today.
Each share represents a small stake in the equity of a company. You can buy large or small lots to match the amount of money you want to invest. Why Do Companies Issue Shares? Companies issue shares to raise money from investors.
This money is used for the development and growth of businesses of companies. A Company can issue different types of shares such as ordinary shares, preference shares, shares without voting rights or any other shares as are permissible under the law. Why Do Investors Buy Shares? Studies have shown that over a twenty-year span, investment in shares has provided greater returns than most other forms of savings.
Shares can provide you with a regular stream of income through dividends as well as the potential for your investments to grow in value. If the prices of shares go up, you can sell them for more than you paid. This is called capital gain. Dividends are returns paid to shareholders out of the profits of the company. Returns can be in the form of cash or additional shares of the company called bonus shares. What is Capital Growth? This is one of the ways in which shares differ from deposit accounts.
The principal amount of money you put in a bank or any fixed income savings scheme always stays the same e. With good management, the value of your investment in shares of a company can grow over time so that your shares are worth more than you paid for them. This is capital growth. Buying shares can offer advantages over saving in deposit accounts: You share the rewards when the company does well and the price of the shares goes up.
But if the company performs badly, the share price may go down and the value of your investment will be reduced. Other factors, such as the performance of the stock market as a whole and the general economic climate, may also affect the price of your shares. The shareholders can be rewarded for taking this risk and the potential return on your money can be higher than that on other investments.
You can reduce your risks with careful planning. Know What Investment Products are Available: The following types of securities are available on the stock market for investment: Ordinary shares of listed companies Unit trust schemes Mutual funds certificates Corporate bonds i.
Know Your Investment Profile: A wise investor chooses an investment product not only according to his goals and the amount of capital available but also according to his tolerance for risk. All investments carry a certain degree of risk. Depending on the extent of risk you intend to take, you should pursue an investment strategy aggressive, moderate or conservative that fits your risk profile.
Be skeptical of any thing picked up from rumors, particularly if you cannot rationally explain their choice. It is important to have the power to hold your investments for longer periods. Studies have shown that investments properly timed and based on strong fundamentals have been very profitable for investors in the longer term.
The best way to minimize risk is to diversify your investments across various investment products. If equities are your sole investments, it makes sense to diversify between different companies and sectors. In this way, loss made on some investments can be absorbed by gains made in others, keeping the overall return on investments positive. You can also diversify your investment by investing in open-end funds managed under various unit trust schemes.
While investing in mutual funds check the rating of the instruments. Similarly while investing in any security please check the rating if any available. Do not invest any money with the stockbroker as a deposit at fixed rate of return. Such a deposit has no legal standing and the investor is exposed to risk of losing his money. The aim of investing in stocks and shares is to buy at low and sell at high.