Invest in foreign companies. Investments in foreign companies and example of earnings

Ramesh Haridas, entrepreneur and early stage investor, USA

My investment focus includes projects aimed at solving complex technical problems. That's why I'm particularly interested in Russia, which provides access to world-class technical and engineering talent that is cheaper than what I can find in the US or UK.

I expect the most significant growth in the near future in the field and technologies for business. I usually invest in projects whose team has at least one founder with a technical background, as well as a clear plan for selling the product and attracting users.

Ari Koronen, Lagoon Capital, Finnish Business Angel of the Year

According to my observations, in Europe and Russia there is now an acute lack of funding in the second, third and subsequent later rounds. In the ecosystem as a whole, there are difficulties with exits: there are not enough local venture companies willing to invest tens of millions of euros in startups.

European economies are much smaller than those of the US or China, where companies can grow in huge domestic markets before expanding to the global stage. Therefore, international investors can find interesting startups at earlier stages and enter their capital on favorable terms.

3. Fintech projects

Charles Seedman, managing partner of ECS Capital Partners, co-founder of American Angel Capital Association

I believe that great ideas and strong people are everywhere, and what entrepreneurs from developing countries miss out on due to cultural and economic factors, they can more than make up for with their own ambition and drive. Start-ups from catching-up countries can focus on “landing” business models and solutions that are successful on a global scale in the local market, or on creating a company that competes in the global market.

In any case, to get on the radar of an international investor, an entrepreneur must meet the highest standards: no one will make “discounts for geography.” Personally, I am interested, including in Russia, in financial projects that develop according to the principle: doing well is the best and most sustainable path to doing good (doing better is the most reliable way to do well).

4. Medical services and foodtech projects

Kushalya Chokshi, Founder and President of Scaale Group

I look at startups all over the world, and especially in developing countries. I select companies based on their results in the local market, potential in the international arena, as well as the mentality of the founders and existing investors.

I am confident that Russia has a solid technological base for the development of the digital economy. A huge number of talented people, together with relatively low operating costs, government support and the participation of private investors, create unique opportunities for the development of commercially effective startups that can play a significant role in global markets, including developed countries.

The integration of modern technologies into traditional sectors of the economy opens up much greater business opportunities in developing countries compared to established innovation centers such as Silicon Valley. I advise entrepreneurs and investors to pay close attention to the areas of creating new infrastructure for smart cities, mass education technologies, integrated medical services and telemedicine, and agricultural technologies that increase productivity and food quality.

5. I only invest in talent.

Riku Asikainen, Finnish Business Angels Association (FiBAN), co-founder of SLUSH and StartupSauna (Finland)

I am sure that there are really smart people who are capable of making high-quality projects all over the world. Statistics say: there are about six of these people out of a million. There are approximately 150 million people living in Russia, which means that about 900 of them are super smart and capable entrepreneurs, and maybe more, since Russia has a very serious engineering education. My task, as a business angel, is to somehow find them and help them create their own business. This is my main goal in Russia.

In a startup, I always look at people first. If I don't believe I have extraordinary talent in front of me, then I don't invest. Of course, it is important to have a product that customers will love; competitive advantages and a clear and acceptable pricing policy are important. I always hope that my best investment is yet to come, that I will get more than I expect from each startup I support.

6. There aren’t enough really big startups on the market yet.

Peter Brown, Member of the Board of Directors of the European Association of Business Angels, Seed Funds and Other Early Stage Players (EBAN), MountainClub AG (Switzerland)

Over the past 10 years, European and Russian venture investors have made great strides forward. Among the most obvious positive trends, I would name the growth in the number of business angels and the total volume of investments in the early stages, the emergence of government programs aimed at facilitating the venture capital market (from grants to direct co-investments), the development of tax incentives to encourage angels, the creation of an ecosystem and advanced technological clusters.

However, despite these obvious positive changes, there are still problem areas in the market, including: the system of financing fast-growing companies, establishing international cooperation, early exit of investors and, as a result, the lack of truly large startups. In my opinion, the main opportunity that is opening up in the market now is increasing the synergy between talented founders and experienced business angels.

7. Russia has great economic potential

Marcus Dantus, Director of StartupMexico

Now more than ever, developing countries can improve their competitiveness and innovation by developing an entrepreneurial culture and ecosystem. With the spread of new progressive methodologies for building companies (such as lean manufacturing and design thinking), digital technologies, with the simplification and improvement of programming languages, with the penetration of social networks and guerrilla marketing, entrepreneurship is becoming a new social elevator.

I visited many cities in Latin America, Africa, Asia and Europe that no one would consider a hub of entrepreneurship or a generator of innovation. However, even there I noticed a widespread “entrepreneurial fever” that affected all levels of society, government, various industries and even the academic community. I am confident that everyone will benefit from this process, especially the BRICS countries (Brazil, Russia, South Africa, India and China) and the MIST countries (Mexico, Indonesia, Singapore and Thailand). They are the first to come to mind when it comes to new economic centers of the future.

The prerequisites for this: existing infrastructure and economic opportunity, multiplied by a large number of educated and talented people, a lack of quality jobs and a new generation of millennials ready to destroy the existing status quo.

These and two hundred other business angels and venture investors with experience in global markets will come to Russia for the international summit of early-stage investors VOLGA ANGELS, which will be held in Samara on September 7-9.

But most developed countries in the world have higher credit ratings:

• USA - AAA
• Japan - AAA
• Britain - AAA
• China - AA
• Australia - AAA

Thus, the withdrawal of capital to countries with higher credit ratings helps reduce investment risks.

High protection of investor capital

Investment risks are reduced not only due to a higher country rating, but also due to the investor capital protection system. In Russia, investor savings are protected only on bank deposits. The amount of deposit insurance provided by the Deposit Insurance Agency in the event of bank bankruptcy is 1.4 million rubles. Broker accounts are not protected in any way in the event of bankruptcy or fraud (more details: What to do if a broker goes bankrupt?).

In foreign countries, the investor capital protection system is more developed and provides higher protection. In the US, bank deposit insurance is limited to $250,000. Brokerage accounts are insured by SIPC (Securities Investor Protection Corporation) for an amount of $500,000 (including $250,000 for cash). In European countries, insurance for bank accounts is up to 100,000 euros, for brokerage accounts - up to 20,000 euros.

Investments in Russian insurance companies, for example, in savings or investment life insurance, are also not protected in any way in case of bankruptcy of the company. The only hope is reinsurance companies. Protection of savings in foreign investment and insurance companies that work with Russians is 90-100%, depending on where the company is registered and what protection scheme is applied in that jurisdiction.

Development of the financial industry

The modern Moscow Exchange (formerly MICEX) began its work relatively recently - in 1992. The three largest stock exchanges in the world began to operate much earlier: London - since 1801, New York - since 1792, Tokyo - since 1878. Foreign stock markets have a much longer history.

The same applies to financial instruments. For example, the oldest mutual fund in the United States, Massachusets Investors Trust, which still exists today, began operations in 1924. ETFs were introduced in 1993. In Russia, the first analogues of mutual funds - mutual funds - appeared only in 1998, foreign ETFs - in 2013.

The foreign financial industry has a longer history of existence, during which it has been able to accumulate extensive experience, develop legislation and regulate the industry. For example, in Russian legislation there is still no such thing as an exchange-traded fund (ETF), so all ETFs on the Moscow Exchange are issued in other countries.

Large selection of financial instruments

The degree of development of the financial industry also affected the number of available financial instruments. Only about 300 shares of Russian companies and about 1,000 bonds are traded on the Moscow Exchange. About 500 more American shares are traded on the St. Petersburg Stock Exchange. The number of Russian mutual funds for 2018 is 1,300, of which only 287 are open. The value of assets under management of all mutual funds is 763 billion rubles. The number of ETFs on the Moscow Exchange is only 14.

In the USA, the number of companies whose shares are traded on the stock exchange is approximately 5,000. The capitalization of the US stock market is 32,120,702 million dollars. In total, more than 40,000 shares are traded in the world, the total capitalization of the world's stock markets is 79.214 trillion. Doll.

There are 9,000 mutual funds in the United States, with $19 trillion invested in them. dollars. The number of mutual funds in the world is about 114,000. The number of ETFs in the USA is 1,700, around the world about 4,700, with 3.42 trillion invested in them. Doll.

The capitalization of the Russian stock market is 623,424 million dollars, Japan 6,222,825, France 2,749,314. The share of the Russian stock market in the global capitalization does not exceed 2%.

Thus, the Russian stock market occupies a very small place in the world, while foreign markets provide a much larger selection of financial instruments. Unlike Russian brokers, which in most cases provide access only to Russian exchanges, foreign companies allow you to buy financial instruments on dozens of exchanges in different countries from one account. Therefore, most foreign financial instruments will be available without any problems.

Available asset classes through funds

The limited number of funds in Russia affects the availability of foreign assets. Through Russian funds you can invest only in a very limited list of foreign assets. Through foreign funds the number of available assets is much larger.

Table of availability of foreign assets through Russian and foreign funds

Low commissions of foreign funds

Investors in foreign funds incur fewer costs. With trillions and billions of dollars invested in foreign funds, management companies can charge lower fees. The amount of assets under management of Russian management companies is much smaller, so they are forced to take a larger fee as a percentage of the NAV in order to earn a profit. 0.1% on a billion dollars is more than 1% on a million.

Average fund fees

The annual remuneration of management companies in mutual funds is on average 2-5%, in foreign mutual funds 1-2%. Commissions for ETFs available in Russia are 0.5-0.9%. Commissions in most foreign ETFs are tenths or hundredths of a percent and do not exceed 0.5%. Since the largest funds are located in the United States, American index ETFs have the lowest fees. The list of ETFs with the lowest fees can be seen below.

There are funds that pay dividends

Almost all Russian funds do not pay dividends. All dividends and coupons that the fund receives are reinvested within the fund. Thus, in order to receive income, the investor has no choice but to sell part of the securities, or to form a portfolio of stocks and bonds himself.

Unlike Russian ones, foreign funds can both pay and accumulate dividends. That is, the investor has the opportunity to make a choice and form a portfolio of funds of the desired type. If the fund pays dividends, there is no need to sell fund shares to generate income.

These are not the only differences between Russian and foreign investment funds. You can read more about their comparison HERE.

No language barrier

One of the common myths of foreign investment is the need for a good knowledge of English. Indeed, the main language of most foreign companies is English. However, knowledge of English will not be required in all cases. Some foreign companies are focused on an international audience, including clients from Russia. Therefore, they have websites in Russian, translated documents, and even Russian-language support or representatives in Russia.

Therefore, if using English is a problem, you can choose one of the foreign companies that supports Russian for investment. For example, this is the American broker Interactive Brokers or the investment and insurance company Investors Trust.

The only problem may be researching information about foreign stocks, bonds and investment funds. Information about them is only in English. In this case, you can use online translators or contact a financial consultant who will help you create an investment portfolio.

Simple account opening procedure

Another advantage of foreign investments is that there is no need to travel anywhere to open an account with a foreign company. You can open an account with a foreign broker or insurance company remotely. In the case of a brokerage account, you need to register a personal account and fill out a web form on the broker’s website, and then send electronic scans of two documents for verification.

In the case of an insurance company, opening an account occurs through a representative of the company, who will help you correctly fill out the necessary forms and documents and send them to the insurance company for review.

In most cases, verification of documents and opening of an account occurs within one to two weeks. The only exception here is foreign banks, many of which require a personal visit to the bank.

Disadvantages of foreign investment

Limited selection of companies

Unfortunately, not all foreign companies work with Russian citizens, so the choice is very limited. And over the years the situation only gets worse. The number of foreign brokers with whom a Russian citizen can open an account today has decreased over the past few years. Brokers Ameritrade, TradeKing, Charles Shwab, MB Trading, OptionsXpress and others have stopped opening accounts for Russians. However, there is still a choice among foreign brokers (more details: Investing through a foreign broker).

The same applies to foreign investment and insurance companies. In recent years, their number has also decreased: Generali and RL360 stopped opening accounts for Russians.

To the credit of all these companies, it is worth recognizing that this did not affect clients from Russia who already had open accounts. They continue to work as before. Therefore, if your plans include opening an account abroad, then you should think about it now, before the number of foreign companies decreases even more.

Required initial amount

Many foreign companies have minimum deposit requirements to open an account. For foreign banks it can be from 50,000 to 1 million euros, depending on the bank.

For foreign brokers it can be up to $10,000, however, some brokers may not have minimum deposit requirements. However, brokers may charge regular commissions, which will be high for small amounts like 1-2 thousand dollars. Therefore, for small amounts, a foreign broker must be selected more carefully, taking into account the tariffs.

Investment insurance companies have different deposit requirements depending on the type of program. Savings plans with regular contributions have a minimum contribution of $100-$500 per month. However, in practice, it is recommended to invest in such programs starting from $300-500 per month or more. Another type of program - with a large one-time contribution - requires much more: $30,000 - $75,000.

Russian brokers and management companies are less demanding when it comes to opening an account. Many brokers do not require a deposit at all to open an account; for others it is small - about 30-50 thousand rubles. As for management companies that offer mutual funds, the threshold for entry into them in most cases is 5,000 - 15,000 per fund (in some management companies it is more or less). For trust management of capital, you will need a larger amount - several hundred thousand rubles.

Higher fees

As mentioned above, the commissions of foreign funds are several times lower than the commissions of Russian funds. As for the commissions of the companies through which investments take place, the opposite is true.

Service fees in a foreign bank depend on the selected package of services and can range from several tens of dollars/euro/francs per year to a thousand or more, depending on the options. Commissions for storing assets are 0.1-0.5% of the amount of assets. Commissions for transactions with securities are 0.2-2% of the transaction volume, but a minimum of 20-30 euros or dollars. Investment consulting - 0.15-0.3% of the portfolio amount.

With Russian banks, depending on the package of services, service can be free or cost several thousand rubles per month.

For foreign brokers, the minimum commission per transaction starts from 1-2 dollars and depends on the number of securities purchased. The broker may also charge a fee for inactivity, which can range from $10 to $20 per month. The commission for inactivity is reduced by the amount of commissions for completed transactions. Some brokers do not charge it at all or stop charging it if the amount in the account exceeds a large amount. Other fees may also apply, such as fees for market data without delay.

In unit-linked savings programs, annual policy maintenance fees can be up to 3%. However, bonuses are provided - additional payments from the insurance company for the duration of the program and the amount of contributions. The longer the program term and premiums, the greater the bonuses, which reduce the overall cost of the policy. Changing funds in the portfolio is free up to 15 times a year.

In programs with a large one-time contribution, annual commissions can be 1-2%. But starting from the first year they gradually decrease and within 5-8 years they can reach 0%. All that remains is the fixed commission for the policy. The commission for the transaction is fixed and amounts to 20-30 dollars. There is no commission for currency exchange.

Russian brokers have much lower commissions than foreign ones. The commission per transaction can be 0.03% -0.1% of the transaction volume. Many brokers do not have a minimum commission per transaction; for others it is about 30 rubles. Market data is free. Remuneration for service may be absent or range from 10 to 150 rubles per month. Often it is reduced by the amount of completed transactions.

The need to submit tax returns yourself

Foreign companies are not tax agents for Russians, therefore Russian citizens are required to independently file a tax return with the Federal Tax Service of Russia and pay tax at a rate of 13%. The obligation to file a tax return arises if income was received on the account in the past year. Therefore, in most cases, a tax return must be filed annually.

The only exception is unit-linked policies. According to the law, income received within the policy does not need to be declared. The obligation to pay tax arises when the amount withdrawn from the policy exceeds the amount deposited. Since policies are usually issued for a long term, there may not be a need to file a tax return for many years.

In the case of foreign banks, the amount of reporting increases: citizens of the Russian Federation who are in Russia for more than 183 days a year must notify the tax office about their foreign bank accounts within a month after their opening and closing. It is also necessary to report annually on the movement of funds in the account. There is no requirement to notify the tax authorities about your brokerage accounts and unit-linked policies, except when the brokerage account is opened in a foreign bank.

When working with Russian companies, everything is much simpler. You do not need to report to the tax office yourself. Russian companies in most cases are tax agents, that is, they themselves file tax returns for their clients and withhold taxes.

No tax benefits

Russian legislation provides tax incentives for investments: an incentive for long-term holding of securities and tax incentives available on individual investment accounts. But they are only available for securities traded on Russian exchanges, and therefore do not apply to foreign investments.

The only exceptions are unit-linked policies, which are life insurance policies. Tax benefits apply to them - tax must be paid only on income received in excess of the refinancing rate.

As you can see, investments abroad have enough advantages to consider them as a good alternative to purely Russian ones: low investment risks, protection of investor capital, a large selection of instruments, low commissions. Disadvantages include higher requirements for the initial investment amount and the need to pay taxes yourself. But these shortcomings are not an insurmountable obstacle, which means that investing abroad today is available to many.

Until 2008, the Russian stock market showed excellent returns, but the dismal dynamics of recent years and problems in the economy forced many to think about investing abroad. In this article I will talk about the main ways of investing abroad, what are the pros and cons.

Ways to invest in Russia

First, let’s remember what methods of investing in foreign assets in Russia are available to a private investor. This:

• trading on the Moscow Exchange;

And each of them has its own disadvantages. Mutual funds charge very high commissions, which means they steal a significant part of the profit; there are also questions about the quality of fund management. FinEx ETFs also have higher fees compared to foreign company ETFs. There are still very few shares of American companies on the St. Petersburg Stock Exchange and you have to pay a high tax on dividends.

Therefore, unfortunately these tools cannot be called optimal. Also, do not forget that the choice is not very large yet: several dozen mutual funds, 11 ETFs and just over 50 American stocks.

Working through a Russian broker

Another way is through a broker. Some Russian brokers allow their clients to buy securities traded on foreign exchanges, but this is only available to qualified investors. To obtain the status of a qualified investor, you must meet at least one of these points:

1. Own securities and other financial instruments whose total value is at least 6 million rubles
2. Have two to three years of experience in an organization that carried out transactions with securities and other financial instruments.
3. Conduct transactions with securities and (or) derivative financial instruments over the last four quarters on average at least 10 times a quarter, but at least once a month. Moreover, the total price of such transactions must be at least 6 million rubles.
4. Own property whose value is at least 6 million rubles. In this case, only the following property is taken into account: cash in bank accounts, compulsory health insurance, securities.
5. Have a higher economic education or any of the following certificates: qualification certificate of a financial market specialist, auditor, insurance actuary, Chartered Financial Analyst (CFA) certificate, Certified International Investment Analyst (CHA) certificate, Financial Risk Manager (FRM) certificate "

Thus, in order to invest in foreign assets in Russia, you need to be a qualified investor or be content only with what is traded on Russian exchanges.

Other reasons, which encourage the transfer of capital abroad:

• lack of confidence among some investors in domestic financial institutions;
• a much larger selection of financial instruments;
• weak economy;
• political and geopolitical risks;
• strong weakening of the ruble;
• high inflation;
• problems in the banking system;
• poor protection of investor rights.

Foreign investments

Many people believe that foreign investment is only available to very rich people. In fact, you can open an investment account in a foreign company even with a small amount. At the same time, we are not talking about shady foreign offices, but about large companies that are controlled by state regulators.

Another myth is that foreign investment is prohibited for Russians. Indeed, a number of laws have recently appeared requiring foreign account holders to report to the tax authorities, but there is no talk of a ban. There are investment methods that allow you to legally reduce the level of communication with the tax authorities and control over your accounts.

It is also not necessary to speak a foreign language well. Some foreign companies have already mastered the Russian language and provide the opportunity to communicate in their native language.

Advantages of foreign investment:

• large selection of financial instruments;
• more opportunities for portfolio diversification across countries, currencies and asset classes;
• diversification of funds by country (storing money in the accounts of foreign companies, and not just in Russia);
• more favorable conditions for financial instruments and investment conditions;
• direct access to exchanges in other countries without unnecessary intermediaries;
• more reliable and higher capital protection (much more than 1.4 million rubles);
• the opportunity to receive passive income (foreign funds pay dividends, unlike mutual funds).

There are currently three ways to invest abroad:

• through a foreign bank
• through a foreign broker
• through a foreign insurance company

Foreign bank

If we talk about investing through foreign banks, then first of all this concerns clients of Private Banking - a service for wealthy clients within which the bank offers banking, investment and consulting services. Investor capital requirements are usually from 100 thousand to 1 million dollars/euro or more. And the larger, more famous and more reliable the bank, the larger the amount required. On the one hand, the bank offers such clients some unique services, advantageous offers, provides a personal manager or financial advisor, and so on. But the investor has to pay a lot for this comfort.

Typically, banks already have ready-made investment proposals - portfolios, their own funds, structured products. Therefore, they primarily offer clients their own products, which may not be the most profitable and optimal in terms of commissions, costs and composition. In addition, large banks are financial holding companies, which, in addition to the bank itself, also include a management company, a broker, and an insurance company, so the bank will strive to sell the client other financial products, such as life insurance.

By the way, last year large Swiss banks introduced commissions for Russians who have less than $5 million in their accounts in the amount of 1,000 Swiss francs per month. Thus, they try to refuse to work with “small” clients.

Opening an account in a foreign bank carries with it the obligation to notify the tax authorities about the opening of such an account and annually report on the flow of funds in the account. In addition, the banks themselves may ask you to document the legal origin of your funds, as they do not want to be involved in money laundering mechanisms. You will also have to file your own return and pay income tax.

As for insurance of bank accounts, the amount of insurance depends on the country: in the European Union 100 thousand euros, in the UK 75,000 pounds, in Switzerland 100 thousand francs, in the USA 250 thousand dollars.

Foreign broker

Foreign brokers can be divided into two categories:

• foreign subsidiaries of Russian brokers
• directly

Daughters of Russian brokers

Most foreign subsidiaries of Russian brokers are registered in Cyprus. This carries additional risks, since Cyprus is not the most reliable jurisdiction from an economic point of view, has low credit ratings, and in 2013 there was a serious financial crisis in Cyprus.

Another disadvantage of Cypriot brokers is that they work through a sub-broker, that is, they do not have direct access to foreign exchanges, so they buy securities through other brokers (American or European). The insurance amount for a brokerage account is up to 20,000 euros.

The advantages include the fact that communication with the broker will take place in Russian, as well as lower commissions compared to other foreign brokers. To open an account you will need an amount from 200 to 10,000 dollars.

Foreign broker

A more reliable way to invest is. Unfortunately, over the past couple of years, several American brokers have stopped opening accounts for Russians and limited transactions on existing accounts: E-Trade, Zecco, Ameritrade, Firstrade, Charles Shwab. But there is still a choice.

Advantages

The advantages of such brokers include the fact that they are registered in economically reliable countries - the USA and Europe. They are subject to local investor protection laws and are regulated by local regulatory authorities. An investor opens an account with a foreign broker eliminates a less reliable intermediary from the chain represented by its Cypriot subsidiary and receives direct access to the stock exchange.

Transactions are made online in real time; an investor can have access to a very wide range of instruments: ETFs, shares, futures, options. Moreover, the broker can provide access to exchanges in different countries. Transaction fees can be fixed or as a percentage of the transaction amount. Funds can be freely deposited and withdrawn from the account at any time.

The amount of account insurance for American brokers is up to 500 thousand US dollars, for European brokers up to 20,000 euros. To open an account you will need an amount from 250 to 10,000 dollars or euros. Communication in most cases takes place in English, but some foreign brokers have Russian-language websites and the ability to communicate in Russian.

Flaws

The disadvantages include higher commissions compared to Russian subsidiaries and the risk of refusal to open accounts for Russians or the introduction of restrictions for already opened accounts. But compared to other methods of foreign investment, this is the most economical.

All transactions for purchase/sale, deposit/withdrawal of funds will have to be carried out independently.

Another disadvantage that applies to working with all foreign brokers is the need to annually file a tax return and pay tax, since foreign brokers are not tax agents for Russians. There is no need to notify the tax office about opening a brokerage account.

Foreign insurance company. Unit-linked.

occurs by opening an insurance policy, which is similar to opening an account with a broker or bank. This method of investing is called. In this case, the insurance policy is only a legal formality and does not provide insurance protection. The point of such a program is to optimize taxation and capital inheritance mechanisms.

At the moment, three foreign insurance companies are opening policies for Russians: Royal London, Investors Trust and Hansard. All three companies are registered in offshore zones: Royal London and Hansard on the Isle of Man, Investors Trust on the Cayman Islands. All three jurisdictions belong to the so-called “white” offshores; their territory has a legal system based on Anglo-Saxon law.

There are two types of plans available to investors: a savings plan with monthly contributions starting from $100/month or a plan with a one-time contribution starting from $10,000. The policy can be opened for a period from 5 to 25 years.

Under this policy, the investor can purchase certain financial instruments offered by the insurance company. Usually this is a wide list of mutual funds from different foreign management companies. For large accounts with amounts of several thousand dollars, almost any exchange-traded instruments are available: stocks, bonds, exchange-traded funds ETFs.

Benefits of unit-linked

Investments are the basis of modern economic life. There are many objects where you can invest your money. We will look at how to invest in stocks. What do you need to know for this? How to choose a broker? Is it possible for ordinary citizens of the Russian Federation to purchase shares?

general information

Many people have heard about it, but few know how to invest in stocks. Why is this option attractive? First of all, it is an opportunity to receive high profits. Of course, there are corresponding risks (but they exist everywhere, even when opening a deposit in a bank). But maybe the fact that it’s almost impossible to go completely broke on stocks will give you the strength to act confidently. Of course, the risk of losing part of your savings remains, but, as they say, those who don’t take risks don’t drink champagne.

Earning opportunity

There are three directions here:

Regarding the advantages of working with securities, we can say the following:

• You can start with small amounts.
• The profit potential is quite large.
• Possibility of receiving high income (higher than what banks offer when placing deposits with them).

Working with securities also has its disadvantages:

• High risks. They can be leveled out with the help of existing knowledge, but this does not guarantee their disappearance.
• Commission from the broker. There may be several options: it is taken regardless of the result or only the amount of profit (this is popular when he recommends investment objects to his clients).

Who is a broker and how to choose one?

We continue to figure out how to invest your savings in stocks. A broker is an ordinary intermediary who works between the client and the exchange. He takes responsibility for purchasing shares, and also provides those who trust him with information about the market in which he operates. Regarding the choice, we can say that there are numerous ratings that will give an idea of ​​what should work and how. When familiarizing yourself with their characteristics, it is necessary to pay special attention to such information as trade turnover, cost of services, the ability to interact in real time (for the client), a simple and quick procedure for registering a relationship, as well as additional information provided by the broker.

For beginners, their activities can be positively affected by the availability of free training, a low amount of money, conducting webinars, as well as competent and adequate staff. It will also be good if there is a physically close office or branch. You also need to pay attention to the ease of replenishing your account and withdrawing money. When you have already made your choice, it will be useful to check whether the chosen office is a “kitchen”. This is the name given to organizations that achieve their own goals at the expense of clients. They will not help you purchase company shares, but will only scam you out of all your money. It should be noted that there are quite a lot of scammers in this area, so you need to keep your ears open.

Where and how can the average person buy shares?

Let's find out how you can purchase securities. For this we need a broker. Thanks to it, you can buy any shares of companies that are available on various trading platforms. Stock markets in Europe, the USA, India, Australia, China or the Russian Federation will be available for interaction. You will need to open an account with a broker, deposit money and select a tariff plan that provides access to the required trading platform. Then we select the securities we like, look at the rate and leave a request, thus informing that there is a desire to purchase them.

A convenient form of interaction is via the Internet using special programs. Popular samples include a choice from QUIK and MetaTrader5. It should be noted that regardless of which purchase method is selected, the shares will be presented in virtual form. The paper form familiar to many has long been abolished. When someone purchases securities, two entries are made. One is in the company about a new shareholder (or a change in the share of the old one), the second is from a broker. Before investing in stocks, you need to select them. To do this, you can follow the recommendations below.

Selecting an attachment object

It should be noted that there are many different approaches. You can use expert advice, technical or fundamental analysis, or simply act at random, relying on your intuition. In this case, liquidity plays a big role. This is the name given to the ability to quickly buy or sell the required volume of securities.

But the smartest thing to do would be to study at least the basics of fundamental and technical analysis and base your decisions on them. You can also study the price of shares and their changes over a certain period of time (month, quarter or year). Initially, it may be problematic to do everything yourself at the highest level. But don't worry, get experience, and in the future you can talk about low risks.

How to minimize costs?

High stock prices are good, but you also need to be able to reduce your expenses. To do this, in most cases it is enough to adhere to certain rules:

• When a deal is concluded, its size should not exceed two percent of the account value.
• Create a differentiated investment portfolio. It will help minimize possible risks.
• Decide on your trading style. You can try several options and choose the most suitable one. In this case, the initial capital, skills and free time that can be devoted to the exchange will have a strong influence.
• Don't shy away from stop orders.
• If there is no desire, time or opportunity to manage your account personally, trust management may be a good option.

Purchase of shares of leading Russian enterprises

Traditionally, blue chips are considered the most reliable. They are characterized by stability and prestige. Perhaps the reader of these lines had a desire to buy Gazprom shares. Well, know that it is quite possible. Moreover, you can buy not only Gazprom shares, but also securities of many enterprises in general. We invite you to familiarize yourself with this list:

Very famous companies, right? Of course, it will be quite difficult to obtain a controlling stake in an enterprise, but you can start creating a bright future for yourself and your children today. It should be noted that at the time of writing, the stock prices of almost all companies continued to fall. Therefore, we can make the assumption that they are at (or near) the lowest level. That is, now is the time to invest!

We looked at how to buy shares of domestic enterprises, and now let's pay attention to foreign companies. After this, theoretical training will be given to get an idea of ​​what you need to pay attention to when purchasing securities. By the way, when we invest in shares of Russian companies, we support the domestic economy. In the long term, this has significant advantages for us.

Shares of foreign companies

You can often find complaints on the Internet that it is impossible to find a company through which it would be possible to go beyond the Russian Federation. This is largely due to a number of features. But first, let's find out what you are counting on? Usually, when they talk about foreign companies, they become hostage to the stereotype of success. But every enterprise is individual, and making money with this approach is problematic. Thus, it is necessary to understand that not all companies have access to a large market, high profitability, production capacity, accessibility to investment and other attractive qualities. The situation is the same as ours - there are a few very successful enterprises, investing in which is a profitable business. But this leads to high prices.

Someone is interested in how to invest money in shares of foreign companies, because he is ready to invest tens or even hundreds of thousands of rubles. But this is not enough, because the minimum costs several million dollars! These words may be mistrusted, so let's look at a few specific examples. There is an international financial corporation that finances medium- and long-term investment projects in the private sector. The minimum investment depends on the chosen project and ranges from $100,000 to $1,000,000. Agree, the average citizen of the Russian Federation does not have that kind of money lying around. Another example is the European Bank for Reconstruction and Development, where investments can start from an amount of $500,000. The reliability of such investments is great. But it is necessary to take into account that investments are made for at least 3 years (although a period of a decade is not the maximum). This, by the way, explains why they are not talked about as investment management companies.

Features of investing in foreign companies

Does the above information mean that the path to such investment is closed for average people? No. Mutual funds help overcome this limitation. To do this, you need to choose a broker, top up your deposit (although here we are talking about an amount of 3-5 thousand dollars) and select the investment period. Keep in mind the fact that in addition to established companies, startups can also be chosen as investment objects. This is an attractive direction that pays off many times over. But at the same time, it is also very risky - for example, about 80% of start-up companies cease operations within the first year after starting operations. In general, the return does not exceed 20% per year (when working with mutual funds).

Also, as an alternative, you can consider not only investing directly in stocks, but also in binary options. Their essence comes down to the fact that a person predicts how the price of an asset will change. Thus, payments are made for successful predictions. But there are many pitfalls and lovers of easy money here, so if you want to use this tool, you need to exercise considerable caution and be very attentive to the company (and also delve into all the mechanisms of its actions).

Nuances

We have already covered many issues. And they constantly talked about how to work through an intermediary. Now let's figure out how to invest in stocks without a broker. If we talk about those securities that are not traded on stock exchanges, then there is no need for intermediaries. It’s a completely different matter if they have already gone through the process of initial placement of securities - IPO. Here, as a rule, work is possible only through a broker. Pay attention to one feature. The fact is that some blue chips can be purchased without resorting to the services of an intermediary. Good news, isn't it? But there is one “but” here. This is only used when working with long-term investments. By the way, banks can also offer a similar service. Of course, you should keep in mind that these financial institutions will take a commission (be prepared mentally for five percent), but in the long run this is usually not that important.

By the way, if we touched on this topic, then let's find out what stocks banks invest their funds in. After all, if these large financial institutions have money and allocate it to securities, then they also have professional analysts who weigh the risks. So let's pay attention to them. Let's say right away that there will be no specific names or titles. Just an outline of the general scheme. Thus, it is important to invest in valuable shares of other banks, as well as enterprises that are actively developing. Moreover, the level of growth of the latter should be several times higher than the national average (or equal to it, but this is only in relation to companies whose development is stable). They also invest money in government bonds of different countries (but so that the profits exceed the risks and expenses), corporate securities and shares of mutual funds.

Conclusion

So we figured out how to invest in stocks correctly. The information presented here is not enough to become a millionaire the next morning, but it is enough to get the theoretical minimum that is enough to start running your own business along this path. After all, you always have to start from something, from some kind of scratch, from a starting point. And everyone has access to long-term investing in blue chips, which will create a base. Accumulating capital in an honest way, alas, takes a long time and takes up a significant period of human life. Perhaps only children will be able to take full advantage of the sown seeds of commerce. But even this is more than enough to start taking action.

How to properly check an investment company? What does the rating of the most reliable investment companies in Moscow look like? What features does an international investment company have?

Hello to the readers of the HeatherBeaver online magazine! Denis Kuderin, an investment expert, is with you.

We continue the topic of profitable investments. A question that will be discussed in detail in a new article is how to choose an investment company.

The material will be useful to both novice investors and those who already have some experience in financial investments.

So, let's begin!

1. What is an investment company and what does it do?

Remember the main tenet of business - “money must work”? So, profitable investing is the most accessible and at the same time the most effective way to make finances work for you.

Money that is kept “in a stocking” is lost money. Even within a month, their real value decreases by several percent, and over the course of a year, the rate of inflation often reaches 10-12%.

Example

According to Rosstat (the main statistics department in Russia), in 2015 the inflation rate in the Russian Federation was 12.9%. And the cost of essential products increased by 15-17%.

Conclusion: capital should be invested in profitable investment instruments. Skillful investments create passive income - not only professional businessmen, but also all reasonable people ultimately strive for this type of income.

4. Rating of TOP-7 investment companies in Moscow

To make it easier for our readers to navigate the boundless financial ocean, we have compiled our own rating of investment companies for them.

The offices of the organizations presented below are located in Moscow, but this does not mean that residents of other cities cannot use the services of these companies.

Thanks to the Internet and the use of modern payment systems, you can make deposits from anywhere in Russia, as well as withdraw them to your accounts.

So, TOP-7 main players of the Russian financial market.

1) TeleTrade

A group of companies focused on various investment areas. Investors' money is managed by professional analysts, traders and brokers, making long-term and short-term investments in stocks, the Forex market, futures, and precious metals.

Among the advantages are 20 years of successful work in the investment market, training programs for clients (video lessons and traditional training), information support for investors.

2) Simex

– an investment platform focused on online deposits. Not only residents of the Russian Federation, but also citizens of other countries can become investors. A large selection of investment projects - investments in shares, existing businesses and promising startups.

The company's list of advantages includes a minimum initial investment, the ability to invest in two clicks, and earnings through an affiliate program with zero initial capital. Users can sell their shares to other participants.

3)

The company was founded in 1994. It has membership in the National Stock Association and provides users with trading and brokerage services, as well as annual and current financial reports.

Clients have access to a unique service on the Russian market - individual investment accounts. There is also the possibility of buying/selling shares to individuals on the over-the-counter market.

- profitable investments in developing sectors of the Russian economy. Cooperation with legal entities and individuals, consultations with investors, constant search for promising investment areas.

A course towards stable income for investors and direct participation in improving the economic situation in Russia. Full responsibility for the development and implementation of financial strategies for investors, insurance assistance in order to increase client safety.

A diversified investment company operating since 1992. Included in the TOP-6 largest organizations in the Russian Federation in terms of attracted capital. Winner of the Russian “Financial Olympus” award.

The list of investment products is extensive - brokerage services, online trading, trust capital management, trading in foreign exchange markets, venture investments, financial consulting.

– the company is part of the investment and construction holding E3 Group, founded in 2009. The main profile is real estate investment. Maintains a course for long-term deposits (due to the specifics of the investment instrument).

Among the advantages of the company are the opportunity to start with a small (for the real estate market) amount (from 100,000 rubles), three types of insurance for each deposit, and collective investments.

7) Golden Hills

Professional management and increase of private capital. Guarantee of 15% per annum with minimal risks for the investor. A new look at profitable investing and a new approach to financial management.

The company adopts the experience of Western investment companies and uses it on the Russian market. The list of areas for deposits includes stocks, bonds, gold, real estate, art, and direct investments.

For clarity, let us present the main characteristics of investment companies in the form of a table:

№	Companies	Estimated profit	Features of working with deposits
1	Teletrade	Not fixed	Possibility of Forex trading through intermediaries
2	Simex	From 24%	Focus on modern online technologies
3		From 20%	Individual investment accounts for investors
4		Depends on the size and type of deposit	Focus on investment in the Russian economy
5		Depends on the choice of investment product	Large list of investment areas
6		25%-45%	Investments in liquid real estate
7		From 15%	Deposits in the Russian Federation and abroad

5. How to check an investment company - 5 signs that you are collaborating with scammers

In times of crisis, investors' risks increase. It's not just about economic instability, but also about the increase in the number of different types of scammers.

Many swindlers are eager to cash in on the trust of investors and invest their money not in profitable projects, but in their own pockets.

To protect your savings, act with extreme caution. There are signs by which one can easily distinguish dishonest “merchants” from bona fide participants in the financial market.

Sign 1. Lack of open financial statements and other constituent documents

Certificates, licenses and other documentation, without which the existence of an official legal entity is impossible, have already been mentioned above. I will add that self-respecting organizations are always ready to provide users with financial reports for the past and current periods.

If a company claims to have a department of traders who make money for investors in the foreign exchange/stock markets, it is required to present trading reports and trader certificates upon request.

Sign 2. No agreement was concluded between the investor and the company

Relations formalized in the form of a formal agreement are the basis for security and long-term mutually beneficial partnership.

Often on websites it is suggested to simply fill out an offer - check a box in the electronic document. More reputable companies enter into real contracts with signatures and seals. Such a document, whatever one may say, inspires more confidence.

Sign 3. There is no photo of management on the company website

Without a photo of the director or members of the board of directors, the company’s website looks somehow incomplete, as if it is hiding something.

If the resource contains a photo of a manager, his biography, life position and views on management policy, this demonstrates serious intentions, openness and a focus on long-term work.