The Financial Market that is the stock exchange is a place where millions of investors come together and trade in financial instruments. We are all familiar with how the stock market works and how trading takes place, but now the question comes ‘In which financial instruments should the investor trade in the market’ keeping in mind the volatility and risk occurred while trading in the stock market.
There are various financial instruments through which an investor can trade in the market:
In this instrument the trading is basically done in shares which can be either Equity or Preference shares depending upon the investor on wanting a regular return or risky return.
In Equity the return need not be fixed and has a high volatility in receiving a return.
But if we look at the preference share there may be an advantage of the preference to receive the return before the equity shareholders as well as the fixed return received to them which in turn is a safety investment for the investors.
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