Investment quality of securities. The concept of the securities market. The main types of securities.

Today, the popularity of securities as an investment tool is constantly growing. At the same time, they are increasingly acquired by small investors who do not understand the economic essence of such a financial instrument and do not know how to evaluate the investment quality of securities.

Securities can be described as a type of financial obligation that
Confirms the owner's right to receive profit or possession of a part of the property of the issuer.

Before you buy the debt assets of an enterprise, it is important to assess the investment quality of securities. The most important evaluated characteristics are:

- liquidity - the ability of financial instruments to be transformed quickly and without significant losses by selling in cash;

- profitableness is an opportunity of a gain of the capital in case of purchase and the subsequent sale of a security;

- investment risk - the possibility of partial or complete loss of funds invested in any financial instrument;

- Reversibility is the ability of a paper to be sold and bought on the market.

All these characteristics affect the present and future value of the asset.

We can say that the investment quality of securities depends on the type of financial instrument. The characteristics of the paper can be influenced by: the financial well-being of the issuer, reliability and security of investments, and Possibility of conversion.

In general, the stock market is a set of relationships that are interrelated with the issuance and circulation of financial instruments. Classification of the securities market is determined by practical significance:

- for the purposes of functioning of the market, primary and secondary are allocated. The first is a relationship about the initial placement of securities between investors, the second - the subsequent trade of already placed instruments;

- Organizational and spontaneous markets are distinguished by the degree of organization;

- depending on the type of circulating stock values - stock markets, bonds and the like;

- in the category of financial instruments - the main markets, as well as derivative securities.

Basic securities are financial instruments that are based on property law. The most common of them are stocks and bonds.

The action is a financial instrument that confirms the right Investor for a certain share of the property of the joint-stock company, part of its profits, as well as the opportunity to participate in the management of the company. The share is a share paper, that is, the money received upon their issue, belong to the company and can not be refunded.

The bond refers to debt securities, it certifies a loan agreement between its issuer and the holder.

Derivative financial instruments are based on price assets, which include: prices of goods or basic securities, credit or foreign exchange market. Such assets shall certify the right or duty of the holder to purchase or sell, on certain criteria (price, quantity and time) the underlying asset. This group includes bills of exchange, options, bills of lading and many other instruments.

A promissory note is an unconditional obligation of the person who issued it, to pay the holder a certain amount in the stipulated terms.

The option provides the right, and not the obligation to acquire an asset at a fixed cost.

Bills of Lading represent the unconditional obligation of the sea carrier to deliver the goods in accordance with the terms of the contract.

The variety of securities leads to the fact that the investor in the process of choosing investment tools faces a wide choice. In order not to be mistaken, choosing the way of investing, it is necessary to carefully study the investment qualities of securities.