Equity investment: Avenue with high potential
Equity investment is one of the asset classes where everyone is getting more infused due to its potential for high performance in the mid to long tenure of investment. But having more than 5000 listed equities in India is a very tiring and complicated task to identify the opportunity with high potential return stocks. To help the investor for selecting and identify the stock, equity advisory services come in very handy.
Equity Advisory service Advisory service in India is binded by the SEBI regulation and mechanism, where the advisory service provider needs to be registered with SEBI before his service setup. Equity advisory is often given to the investor or the traders, trading in Mutual Funds, Shares & Exchange-traded funds (ETF). Equity Advisory service is currently bifurcated into 2 major types of service: - Robo Advisory & Investment Advisory. Robo Advisory Robo Advisory are digital platforms that provide algorithm-driven & automated financial planning services for Equity with little to no human supervision. Robo-based equity advisory services are highly based on data & algorithms which are based on the online survey about financial situations & goals for the future as well as recording all the past transactions and investment or trading patterns used by the specific investor. The major benefit of this advisory service is AI-based (Artificial Intelligence) which has a low subscription cost, helps with Tax-loss harvesting, rebalances portfolio & equities as per the risk profile for investors & instant attentive service. Investment Advisory Investment-based equity advisory firms help the investor to decide what to do with their money. They are professionals with a deep understanding of Fundamentals, and money management & good with the construct of personalized financial plan that is aimed to achieve the financial goals of the investor. The success of the financial goal depends highly on the experience & expertise of the advisory service provider with a good track record. The stock advisory also needs to maintain clarity with the investor on whether to opt for short-term trading or long-term wealth building and formulate the strategy as per the goal decided. There are times when the equity advisory offers a private equity portfolio to clients as per the requirement and goals. Private equity typically refers to the equity that is not listed & is tradable among private individuals or institutions. More formally private equity is the type of equity that consists of equity securities and debt in operating companies that are not traded publicly on the stock exchange. Private equity investments are generally made up of venture capital firms, angel investors & private equity firms. Private equity Funds (PE Funds) are also issued where a collective investment scheme is used for investing in various equity associated with the private limited companies. Private equity funds are raised and managed by the investment professional of a private equity firm with the support of a general partner and investment advisors.
Private equity fund managers try to manage the private equity fund efficiently and launch a new private equity fund every 3-5 years as the previous fund gets fully subscribed or invested.