How to Invest

Now that you know how an anonymous society takes its shares to the stock exchange market, surely you will be asking yourself what to do for investing in a society of these characteristics. This question has two possible answers. One way to do it is by investing directly on the market by buying ordinary or preferential shares, if these last are at your disposal. The other way is through debt investment, that is, investing in debentures issued by these anonymous societies.

Ordinary Shares
When you hear people talking about shares and of the stock exchange market, surely they are referring to ordinary shares.

Before, in this same section, we explained what an anonymous society is and how they offer their shares to the public. When a company quotes on the stock exchange market it gives the investor the possibility of owning part of the same by the acquisition of a determined number of ordinary shares. The securities that are most traded on the different markets are, then, the ordinary shares.

When the investor buys ordinary shares of an anonymous society, he is buying a “fraction” of such society. If the company prospers, this circumstance is traduced into a rise of the quotations of the shares. But, if on the contrary, the business is not doing well, the most probable is that the quotations will drop. When buying ordinary shares you are getting to the growth and future profits of the issuing company. The return of your investment will come mainly due to its revaluation that usually receives the name of capital gain. On the other hand, you will also benefit from your investment through the collection of dividends that the companies usually pay to their shareholders. In this sense, you must know, that the companies are not oblige to dividends to ordinary shareholders, there may even be the case that the shareholders of a determined company that might be enjoying of a sudden expansion on their sales and profits, would rather not collect dividends so that its sums may be used to impel even more its growth.

The usual, then, is for this companies in expansion to pay low dividends or not to pay anything for this concept; sometimes what they do, instead of paying dividends in cash, is that they pay them in shares, (when the dividends are paid in shares the ordinary shareholders receive a determine number of additional securities, though the percentage of participation of these shareholders in the company remains the same). The investors only center their attention on the cash dividends when the companies are mature or are in sectors controlled by the government, being an example of these last the public service companies. However, even this tradition (accepted long ago), is being put on trial by the liberal politics, that turns the public services companies into objects for acquisition or absorption and makes it possible for its shares to generate profits.

The ownership of these ordinary shares bring with them certain rights and privileges. The federal laws requires for the anonymous societies that quote on the market to give to their shareholders periodical reports (quarterly and annual) about their accomplishments and of their financial situation. Furthermore, the shareholders must also be punctually informed of any important event that might affect the company, such as, for example, the destruction of a factory, the resignation of a high executive or an offer to buy the society. For their part, the management of the society must call once a year upon the votes of their shareholders. This is done through a power application accompany by an exposition in which they ask the shareholders to vote for the permanence of the actual management. They are informed about the possession of shares that each of the high executives of the company has, the members that possess more than 5% of the shares). And they also inform about the salary perceived by the directors.

Any changes on the status of the society have to count with the approval of the shareholders. All anonymous society that is quoted at the stock exchange market has to celebrate annually an ordinary meeting of shareholders, which constitutes an open forum in which the shareholders and the management exchange opinions and points of view.