Investment Companies

Investors participate of these investment companies depending on the amount of their investments. Which means that even with a modest investment the investor is the owner of a share in diverse stock and bond portfolios.
Investment companies have reached near in relation to providing the ideal type of investment for millions of investors that do not want to manage their own investments. Managers of these investment companies invest funds from investors in varied stock portfolios, bonds and instruments in the money market.

An advantage of this kind of investments is that investors that do not have time to manage their own financial investments or do not have the knowledge of individual financial values can invest their money in a diversity of stock and bonds portfolios, as well as in the money market instruments that offer mutual funds. Even so mutual funds are more often being monitored by regulators (Securities and Exchange Commission and the New York Attorney General for example) because of the excessive fees charged and for using the market timing shares in some mutual funds.

This shocking practice done by some mutual funds have put them on a dilemma on whether to invest or not in mutual funds. Many of them have turned to the exchange-traded funds as a more popular investing alternative.

Money growth that are managed by mutual funds companies have made them become important pieces of the stock market. According to the Investment Company Institute by the end of 2004 the mutual funds industry had moved around a $16.06 trillion of investors capital all over the world. With that many mutual funds from where to choose the investor should be very careful when selecting a mutual fund as well as to invest in individual stocks.

Stock Exchange

The stock exchange, also denominated as the stock market, is one of the markets of the financial system were in an organized way professionals gather periodically to negotiate public or private securities.

A financial system is that which puts in contact, through a market, two types of economic agents: Those economic agents with a surplus of funds (money suppliers) and those economic agents with a shortage of funds (money requesters), being the financial assets the merchandise which is object of the exchange. So then, a financial system s composed of markets, assets and of contact all those participants in the market. The financial assets money and it constitutes for them a liability. It is a way to maintain wealth for those who posses it. Therefore, financial assets and liabilities are the two sides of a same coin (investment-financing). According to the source of emission of these securities we will talk about public securities (issued by public institutions or private (issued by private institutions).