A choice of markets

Equities

These are often referred to as shares or stocks. An equity is simply an asset that entitles a holder (share or stockholder) to a part of a company and/or its profits. Most ordinary shares entitle the holder to vote at the issuing company’s annual general meeting. Many shares will pay a dividend which is a periodical payment made at the discretion of the board of directors as a reward to shareholders for their ongoing support.

Equities can be traded on exchanges in the country in which the company is based although many very large organizations have their shares traded in other countries. Equities have been relied upon over many years to build wealth and are a staple in many investment portfolios. The price of equities can be subject to mild or wild fluctuations depending on the issuing company and the sentiment of the market towards it.

Increasing your equity
assuring your fixed income

Fixed Income

Fixed Income refers to a product that pays a yield on a regular basis. They are often called bonds and are essentially loans that are packaged in the form of a security. Corporations, municipal authorities or governments issue bonds to secure access to capital from investors. In return for borrowing the investor’s money, the issuer pays an agreed return (called a coupon) at regular intervals for the duration of the loan. Once the bond term ends (it reaches maturity) the issuer must repay the principal sum paid for the bond.

Bonds are generally considered safer assets than stocks as, on the whole, the biggest issuers are often very credit worthy and their prices are not as subject to wild fluctuations as equities but not all bond issuers are created equal. Sovereign countries issue debt to pay for public spending while corporations issue them to help with expansion or to buy back their stock thus improving shareholder value.

Bondholders enjoy a certain level of protection in many jurisdictions because an issuer that, for example, declares bankruptcy, will have to repay its creditors before any money is distributed to shareholders who can potentially end up with worthless stock.

Commodities

Commodities are generally raw materials. Hard assets like gold, silver, iron, copper, oil, wheat and many others that are traded on dedicated exchanges around the world. Commodities exchanges set a quality benchmark for the commodity but the market sets the price based on relatively basic supply and demand dynamics. Most commodities are priced in the world’s reserve currency, the US dollar. Many investors access the potential for capital appreciation in commodities via exchange-traded funds (ETFs) which track the price of the underlying asset. Lewis Bentley Group offers clients access to a full range of these funds as a highly convenient way of gaining exposure to these assets without having to worry about actually taking delivery.

Investing in natural minerals