Investment
Why invest?
MERCAPITAL, educating to invest
“If you want to be rich learn not only to invest but also save money”
Benjamín Franklin – Inventor, Scientist and Politic of the United States.
¡Do not hesitate and make your best decision now!
“Every time you think you can’t do something, someone else thinks he can”
Robert Kiyosaki – “Rich Dad, Poor Dad” Author.
Not many people can say they earn money while they sleep. This is what the stock market can help you reach.
To achieve this, it is not enough to have a financial culture of income and expenses control, that is, a budget. This is only the first step to reach the goal of making your money work for you.
Establish a goal of monthly saving and with this you can start to invest in the different products that the stock market has to offer. Start with a base investment amount and monthly increase the capital invested, that way, while your money start to work for you, less hours you will need to use of your time in order to generate income.
The best option to start is going with a financial advisor that allow you stablish your investment goals and form a portfolio according to your risk profile, objectives, investment ammount, etc.
Sometimes change can be awkward, but once you make the decision , your life can change and you will be able to forge the future that you always dream for you and your family. The stock market gives you the chance to use your money better than having it in a savings account in a financial institution, generating few interest that in the end of the day are not so representative. Furthermore, it offers you the reliability that every investor need, through strict regulations internal and legal that allow the investor to have enough information to make a decision at the time of investing.
Available investments
Know what products you can invest now
How to invest
Learn step by step how to do it
What to invest?
Fixed income
Short Term
Short Term Corporate Bonds
Short term debt securities usually with maturity of 120, 180, 220 to 359 days. They are negociated with a price discount that determines the bond yield. It doesn’t pay periodical interest. They are issued by approbed companies on the stock market. For example, if you buy a short term bond for $10,000.00 with 359 days of maturity, your cash flow will be the following:
| Invested amount (disbursement) | Term | Yield | Amount to receive at 359 days (only payment) | Profit | |
|---|---|---|---|---|---|
| $9,304.10 | 359 days | 7.5% | $10,000.00 | $695.90 |
Tradable commercial invoices
Commercial Invoices are invoices received by companies with payment term between 30 and 360 days. They are traded with a disccount percentage that determines the yield of the securities. For example: The “issuer” company has an invoice receivable which expires in 90 days but need to obtain inmediate liqudity, so they go to MERCAPITAL, where it is intermediate with an investor who offers to pay in that momment $8,900.00 for an invoice which value is of $9,000.00. Thus, when the supplier of the “issuer” company pay that invoice in 90 days, the investor will receive $9,000.00 and obtained a profit of $100 dollars.
Long Term
Long Term Corporate Bonds
Long term debt securities with more than one year maturity and with a fixed interest rate. To be of more than one year, the profits are exempt from the payment of income tax. They are issued by approved companies on the stock market.
For example, if you buy a long term bond for $10.000,00 from the “issuer” company with an interest rate of 8.5% with 1260 days to maturity, with quarterly interest payment and biannual capital payment, your cash flow will be the following:
| Period (established date) | Interest | Amortization |
|---|---|---|
| 1 | $212.50 | $0.00 |
| 2 | $212.50 | $1,428.57 |
| 3 | $182.14 | $0.00 |
| 4 | $182.14 | $1,428.57 |
| 5 | $151.79 | $0.00 |
Securizations
They are structured securities in an escrow, from assets or future cash flows of issuer companies that allows them to obtain liquidity by placing them in the stock market. The payment schedule to the investor is similar to the schedule of long term corporate bonds (see the chart above).
Variable income
Shares
Also known as equities, they don’t have a fixed interest rate. They represent a fraction of the total company equity, therefore the equities owner becomes a partially owner of the company in proportion to the number of shares he/she has. This proportion also gives the right to gain dividends when the company decides to pay them, coming from the company profit, also in proportion to the shares owned. The profit (or loss) of equities come from: Dividends and market price variations. In the following example, it will be assumed that you aquire shares of the “issuer” company at a determined price and then you sell them in one year.
Favorable Scenario
| Buying Price | # Shares | Investment Value | Dividends per share | Dividends received | Selling Price | Investment Value at the end of the year | Profit | Yield |
|---|---|---|---|---|---|---|---|---|
| $100.00 | 100.00 | $10,000.00 | $10.00 | $1,000.00 | $100.00 | $10,000.00 | $1,000.00 | 10% |
In an unfavorable scenario where the share price drops and there weren’t dividend distribution, the profit will become a loss. This uncertainty of the yield is what makes them securities of variable income.