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Equity Securities - Coggle Diagram
Equity Securities
Common Shares
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advantages
earn dividends - company makes more profits, depends on your holdings will share profits
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disadvantages
dividends are not promised always, totally upto company whether to give or not
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Dividends
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t+1 rule: trade settled before record date to get the dividends (if the record date is 20th aug; anyone who buys shares befpre closing on 18th aug will be on the div list; as t+1=18+1=19 for settling)
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ESG investing
responsible investing, factors to consider whilst investing
environmental shares = clean energy, waste, climate
social shares = human rights, equality, diversity, inclusion, indigenous, community
governance = no corruption, executive compensation, risk crisis management, supply chain management
etfs, green bonds, mutual funds
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Preferred Shares
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features
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participating = can get extra divs; if company is in profits; company can share profits as extra divs
callable = issuer redeem shares @ preset price; company issuing shares can takes the share back anytime & pay investor specific price
retractable = investor demand redemption; investor can force company to take shares back anytime & pay some price for it
divs are paid based on particular rates = divs are paid out like interest payments on bonds; if market rates go up = new bonds offer better rates = better divs ; market rates down = older bonds offer better rates = more divs
types
fixed rate perpetual = divs paid forever, no maturity, callable
fixed reset = divs paid only for first 5 yrs; after 5 yrs depends on market rates; callable; popular in canada
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Stock Indexes
canadian index = s&p/tsx cxomposite index - canadian stocks grouped into 11 categories; market weighted index (ranked as per market cap); s&p/tsx, s&p 500, nasdaq
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international indexes = neikkin (japan), dax (germany), cac (france), ftse (uk), smi (switzerland), nifty 50(india)
esg index = environmental social governance stocks; msci canada = all esg canadian stocks; msci world index = all esg international stocks
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