Page 11 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes objectives and, in addition, should afford them all the incidental conveniences and advantages
which are possible under the circumstances. For evaluation of investment avenue, the following
attributes are relevant:
Returns
Capital Appreciation

Conservation
Aggressive growth
Speculation
Form of return
Periodic cash receipts

Capital gain
Safety and security of funds
Risk

Liquidity
Tax considerations
Conveyance
Concealability
Safety of Principal

The safety sought in investment is not absolute or complete; it rather implies protection
against loss under reasonably likely conditions or variations.
Capital Growth

Capital appreciation has today become an important principle. Recognising the connection
between corporation and industry growth and very large capital appreciation, investors
and their advisers constantly are seeking “growth stocks”.
Tax Benefits
To plan an investment programme without regard to one’s tax status may be costly to the
investor. There are really two problems involved here, one concerned with the amount of
income paid by the investment and the other with the burden of income taxes upon that
income.
Concealability
To be safe from social disorders, government confiscation, or unacceptable levels of taxation,
property must be concealable and leave no record of income received from its use or sale.
Gold and precious stones have long been esteemed for these purposes.

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Caution An investment is a liquid asset if it can be converted into cash without delay at full
market value in any quantity. For an investment to be liquid it must be (1) reversible or
(2) marketable.
Stability of income must be looked at in different ways just as was security of principal.

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