Security
From Economypedia.com
Security in economics is a condition that provides protection from financial crisis. Security is often referred to as a flexible instrument that represents financial value. Security is recognized as an investment instrument that is negotiable and flexible in nature. Major forms of security that offers financial protection includes shares of business stocks, bonds issued by corporate houses or government agencies, mutual funds and stock opinions. [1]
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[edit] Type of securities to invest
Securities can be categorized in to debt securities that include bonds, debentures and equities, each of which is used either as a financial safety or an investment. Explaining each of these types of securities will aid in understanding the concept of security. [2]
[edit] Bonds
This is referred to as a debt investment in which a corporate house or any government agency borrows money from any investor for a specified period of time. A bond market has fixed interest payment and so bond market is sometimes known as fixed-income market. Corporate bonds, municipal bonds, and U.S. Treasury bonds are some of the popular bonds circulated in economy. Bond market now is unpredictable, still bond investors are of view that there will be soon downfall in long-term interest rates.
[edit] Debenture
This is another type of debt security which is represented by a certificate of agreement of loans between the issuer and the investor. The certificate is issued by any company or government agency that carries a guarantee that any debenture holder will get a fixed return after a specified time period. The return from debentures mainly include principal amount along with interest amount. [3]
[edit] Share
Shares are referred to as a part of ownership in a company in which the investors invests money. Several corporate houses issues shares that carries a policy of ownership in exchange of which the investors pays certain amount of money.
Security is depended on certain regulations that are imposed by the regulatory structure of the government of any country. The securities issued by any company have to meet various restrictions imposed by the government. A certificate or an entry in electronic book is representative of holding a security. [4]
[edit] Situation of security market
There has been a huge trade of stocks in past few months. Either there was a push in stock prices or a pull as per the fluctuations of oil prices. Security situation can be largely affected by fluctuations in oil prices, credit markets, financial sector, and housing. As high prices of oil hit economy, there has been more consumer spending and less corporate profits. Stock market showed a downward trend. With the back off of oil prices, stock market again revived. The assumption of natural calamities has led to increase in oil prices and again there is a downward trend in security market. However, economists are of the view that there will be a downward trend until the end of November.
September is a crucial time for debt markets as during this month a large number of new corporate bonds are issued, since this month marks the end of summer vacation and companies are ready with new strategies for the year. Beginning of this year was not fruitful for debt market. It is perceived that if people are ready to buy new bonds then there can be a rise in the debt market. [5]
[edit] See also
[edit] References
- ↑ Financial-dictionary.thefreedictionary[1]
- ↑ Encyclopedia.farlex[2]
- ↑ Financeglossary.net[3]
- ↑ Resources.bnet[4]
- ↑ Businessweek[5]
