There are some other methods which help you decrease the risk of investing in Iran`s stock market. Experts in this field suggest that new comers form a share basket. The share basket means that the investor should buy different shares from different companies (not all shares from one company). Forming a share basket helps investors and new comers not to lose a huge amount by unpredictable events. It is probable that a company may go bankrupt and the value of its shares dramatically decreases. If you are an owner of the shares of that company, you will face a great loss. Not only did not you make any profit, but lost a huge value of your shares.
when you form a share basket, even if one of the companies whose shares is in the basket goes bankrupt, you will not lose a great amount. There are some financial institutes in Iran, forming such baskets for those who are willing. You can refer to them and tell them what shares you desire to be included in your basket. Then pay their fees and they form the basket. You can also ask for consultation from their experts. Some banks in Iran also do the same thing.
Actually, there are two types of share baskets in Iranian banks and financial institutes. The first one is called risky baskets and the other one is baskets with consistent incomes. The first type assigns all the risks on your shoulder. Your income at the end of the month depends on the fluctuations of your shares in the basket. You can gain or lose, based on your prudence in choosing the right shares.
The second type guarantees a fixed income at the end of the month. They guarantee that every month, you will be paid a certain amount, no matter your shares value rise or fall. Actually the accept the risk by their own. For risk takers and all those adventurous business men, the first type is better, but for those new comers who wish to keep their capital and not to lose anything, the second kind is more convenient.
In today market, Iranian banks guarantee to pay an interest of 22% for baskets with consistent incomes which is an acceptable rate in Iran`s financial system.
To Be Continued…
FAR Law Firm