Securities as a possible capital investment

Securities are a possible capital contribution for unused funds of a company. By purchasing securities, the capital return can be significantly increased.

Securities as an investment

Cash lying in the cash register does not yield any interest. Even the money in a bank or postal checking account only has a low interest rate and is therefore rather unattractive as an investment opportunity. Therefore, companies try to keep the level of liquid assets as low as possible. An alternative investment opportunity is sought for surplus capital. Securities are particularly suitable as capital investments. They can be traded quickly on an exchange and enable investors to buy or sell securities within a short period of time. There are a large variety of possible types of tradable securities. The most important types of securities are stocks, participation certificates, and bonds.

Stocks represent shares in the equity of a company. By purchasing stocks, a person becomes a co-owner of a corporation. Profits are distributed through dividends. The value of the stock, which is traded on the stock exchange, depends heavily on the company's development. Buying stocks involves the risk of total loss. If this occurs, the entire invested capital is lost.

Participation certificates are closely related to stocks. However, the owner of a participation certificate has only financial rights but no voting rights like a shareholder.

Bonds represent shares that are associated with a long-term borrowing of a company. By purchasing bonds, a person becomes a creditor of this company. From the bond, there is a claim to a fixed and regular interest payment and upon maturity, the repayment of the capital. A bondholder does not share in the business risk as is the case with a stock or a participation certificate. As a result, compared to other types of securities, there are also significantly fewer price fluctuations.