Investing for Beginners .EU, investing

investingforbeginners.eu Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.
Benjamin Graham

Investment Dictionary


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Direct Investments in Stocks

 

Direct investments in stocks are investments made without financial intermediaries (only theoretically). It means an investor buys stock directly from the company without intermediation of stock exchange or brokerage firm. 

 

Direct investment in stocks usually is made in large stakes of the company with significant role in company’s management (not necessary a control of it). A lot of investments made by private equity funds are direct investments. Private equity funds provide a capital for companies and try to make companies’ activity much more effective. When profits and the value of the company increase such stocks are sold with a profit.

 

Direct investment is possible not only in securities but also direct investment in tangible assets without help of securities.






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