What is the difference between Saving and Investment?

Saving is in our daily life generally means as putting money aside for rainy days. Just to keep money in bank or some where like soaks –. So it means you save particular amount of money for your future use. But if we consider saving with economic point of view than the definition is little changed. According to economics, saving is the personal disposable income minus personal consumption expenditure. It means the money which does not consumed immediately for buying goods. Or a part of income is saved. There is no risk factor involve.

As far as we are talking about investment than it is certain amount of money which is saved or use in some projects or certificates where we can take profit more than the money we have saved or invest. In general terms investment means the use of money to make more money. According to economics it is the production per unit time of goods are not consumed but use for future production. Example on purchase of saving certificate there we get certain interest value which is more than our saved amount. But in some cases if you purchase shares there always a risk factor involves. Because in that case we might get a loss on amount we invest.

What is mutual fund?

ABN Amro Asset Mgmt India, Benchmark MF, Birla Sun Life MF, BoB MF, Canbank MF, DBS Chola MF, Deutsche MF, DSP Merrill Lynch MF, Escorts MF, Fidelity Fund Management, Franklin Temtation MF, HDFC MF, HSBC MF, ICICI Prudential MF, ING Vysya MF, JM MF, Kotak Mahindra MF, LIC MF, Lotus India MF, Morgan Stanley MF, Principal MF, Quantum Asset Management, Reliance Capital MF, Sahara MF,SBI MF, Standard Chartered MF, Sundaram BNP Paribas MF, Tata MF, Taurus MF, UTI MF
In our life all of us save or invest for our future. Many use to save their savings at the bank in saving accounts for merely 6-7% interest annually while some invest in government bonds, policies, fixed deposits (rate of interest is higher than saving accounts) or other securities.
But persons who believe that risk taking are the key of money making, invest in stocks. Yes stocks in average give the higher return in comparison to other investments. But one fact is also that everybody doesn’t have the same time flexibility as well as right concept of the market. So a person who lacks one or both the factors may not invest in stocks! No it’s not like that, thanks to mutual funds. These investment vehicles don’t demand that you have a deep understanding of financial matters; they don’t even demand oodles of your time. The mantra of mutual fund is ‘strength works’. They collect money from a large group of investors, pool it together, and invest it in various securities, in line with their objective. They are an alternative to invest directly.
Thus a mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them.
Mutual fund offer several features that make a powerful and convenient wealth creation box worthy of your consideration. These are Small Investments they offer, Offer of Diversified portfolio, Professional management of our investment, Sharing or managing Liquidity, Tax saving or Tax break schemes etc.
AMFI, The Association of Mutual Funds in India is the association which look after the interest of both unit holders in funds as well promoting the interests of mutual funds: WEBSITE OF AMFI

Finance Minister of India

Mr. Palaniappan Chidambaram is the Finance Minister of India in the Congress Party led United Progressive Alliance Government which took office in May, 2004. Mr. Chidambaram had earlier been Finance Minister from June, 1996 to March, 1998. He is recognized both in India and in the wider international business community as a champion of economic reforms who believes that countries which are open to competition have succeeded in removing poverty.

He studied at Presidency College, Chennai, India and obtained a Bachelor of Science degree. He also received a Bachelor of Law degree at the Law College, Madras University. He subsequently attended the Harvard Business School and was awarded a Masters in Business Administration.
He can be reached by e-mail at fm@finance.nic.in.
Official website of Finance Minister of India is: Website

What is Common stock?

WHAT IS COMMON STOCK?
Common stocks are the primary unit of ownership in a corporation with certain rights including voting and major issues concerning corporation. Shareholders as they are known have liability to the value of stocks. So generally common stocks are issued to the Founders, Board of directors, or employees through employee stock option program.
The holders of common stock can reap two main benefits from the issuing company: capital appreciation and dividends. Capital appreciation is rise in the value of assets based on the rise in market price. For example, say you have purchased a share for Rs 10/ per share, which pays dividend of Re 1/year and now trading at Rs 15/per share a year later. Your capital appreciation will be Rs5 or 50%.
Dividend as explained in earlier posts, are the payments made by the corporation to its shareholder members when it earns profit. Joint Stock Company allocates a fixed amount per share while Co-operatives allocate dividends according to the shareholders performance and activity. Dividend can be paid in cash or additional number of shares.

How stocks trade?

When stocks are bought and sold, it’s called trading. So when you hear that Infosys is trading at 1870, it means if you buy one share of Infosys you will have to pay Rs1870,if you buy two shares then 2x1870, if ten share then 10x1870 and so on!
A Re 1 move in stock price is called a point. If Infosys goes from 1870 to 1871, you’d say that it rose to 1 point. Many investors purchase shares in blocks of 100. A block of shares is called a round lot. Round lot provide a convenient way to tackle your stock investments, because every round lot you own, 1 point move up and down adds or subtracts Rs 100 from the value of your investment.
For example, if you own 100 stocks of Infosys that means 100xRs 1870=Rs 187000. Suppose it rises 1 point then value of your hundred shares of Infosys will get added by Rs100, thus your investment will be Rs 187000+Rs 100. Also if it goes 1 point down then your investment value will be Rs 187000-Rs 100, thus your investment will decrease by Rs 100!

What are Preferred Stocks?

Preferred stock, also called preferred shares or preference shares, is typically a higher ranking stock than voting shares, thus carry no voting rights but may carry superior priority over common stock in the payment of dividends and upon liquidation. Preferred stock may carry a dividend that is paid out prior to any dividends to common stock holders. The main benefit to owning preferred stock is that the investor has a great claim on the company’s assets than common stockholders.
TYPES OF PREFFERED STOCKS:
1. CUMULATIVE PREFFERED: Preferred stocks on which dividends accrue (accumulate or increase) in the event when the issuer does not make timely dividend payments. Most preferred stocks are cumulative stocks.
2. NON-CUMULATIVE PREFERRED: Preferred stocks on which unpaid dividends are not accrue.
3. PARTICIPATING PREFERRED: Preferred stocks which provides a specific dividend that is paid before any dividend are paid to common stock holders in the event of liquidation.
4. CONVERTIBLE PREFERRED: Preferred stocks that can be converted into a specific amount of common stock at the holder’s option.
5. ADJUSTABLE RATE PERFERRED: Preferred stocks whose dividend changes, usually quarterly, according to changes in the Treasury bill or on a similar benchmark.
On the mark of preference Preferred stock can also be divided into two parts:
1. FIRST PREFERENCE STOCK: Preferred stock which takes precedence over other preferred and common stock with regard to dividends and assets.
2. SECOND PREFERENCE STOCK: Preferred stocks which have rights subordinate to those of other preferred stock on dividend and assets. That means they are given preference after the First Preferred Stock.

What are stocks?

Stocks are considered as the plural form of share, thus a stock represents a share of ownership in a corporation.
HISTORY:
It goes right at the time when East India Company was established in1600 AD. The innovation of joint ownership made a great deal of Europe's economic growth possible following the Middle Ages. The technique of pooling capital to finance the building of ships, for example, made the Netherlands a maritime superpower. Before adoption of the joint-stock corporation, an expensive venture such as the building of a merchant ship could be undertaken only by governments or by very wealthy individuals or families.
STOCKHOLDERS:
A shareholder (or stockholder) is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. Shareholders are granted special privileges depending on the class of stock, including the right to vote (usually one vote per share owned) on matters such as elections to the board of directors, the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a liquidation of the company.
Thus anyone holding at least 1 share in any company will be known as the shareholder.

What is share?

Share is the part which we get in process of dividing an entity. For example, three students reside in a single room of a hostel, which means that room is shared between three students. In other sense each students is one-third owner of that room. Sharing figures prominently in gift economies, but also plays a significant role in market economies. The word stock simply refers to a supply. You may have a stock of T-shirts in your closet or a stock of pencils at your desk. In the financial market, stock refers to a supply of money that a company has raised. This supply comes from people who have given money to the company in the hope that the company will make their money grow.
Suppose a group of persons or a business organization propose to start a new project, or want expansion of their company which they are unable to arrange, thus invite the public to be a part of the project. The company as per laws of the government announces the issue of shares through which any eligible person (18 or above in age, have a demat account) can become a shareholder of the company. For example, the value of ABC company has been divided into 100 shares and I own 10 shares of that company that means I am the owner of 10% in that company. In financial markets, a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. A share is one of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends (When a corporation earns a profit or surplus, that money can be paid to the shareholders as a dividend.) , and to a portion of the value of the company in case of liquidation( refers to the process by which a company or part of a company is brought to an end, and the assets and property of the company redistributed).