Shares in the financial context refer to the offerings of a publicly traded company most commonly traded on an exchange. Although a company is allowed to offer large chunks of shares to certain individuals as a private placement, the purchase and sale of the common share is what will interest the average investor.
Trading shares is big business. According to one source, the cumulative value of all shares on the ASX in August 2008 was roughly 1.5 trillion dollars. A comparison study of investment types calculating returns over 10 years in Australia showed shares to have the highest average return, more profitable than say real estate or putting your money into a term deposits. For this reason, many are flocking to the share market in the hopes of earning a substantial reward.
Here are a few more reasons why investors love shares:
- Ability to diversify into virtually any industry
- Puts you in the driver’s seat of your investments
- Some tax benefits
- Ability to grow vastly quicker than inflation erodes
- Excitement and intrigue of the share market
In this section you will learn basic terminology to be comfortable with ‘share speak’. Dividends and capital appreciation are discussed in much detail (the two principal ways you make money with shares). Learn valuable principles such as diversification and concepts like the ‘market’. You will also be taught on the fundamentals of investing in shares so you know what are good shares to buy and those that are too risky and better left alone. Learn the process of finding the right broker, and how to place a trade. This is a must read section!
Shares Articles
The dividend imputation system allows investors who have been paid a dividend to take a personal tax credit (franking credit) since the company has already paid tax (30%) on this dividend.
It is important that you understand the language & jargon of shares, as your evaluation of a company may be dependent on one vital piece of information.
One of the most effective strategies to reduce risk is through diversification. Learn how to diversify your portfolio.
Dividends are the distributions that are paid using profits companies made during the year - it is like a reward to investors who have chosen correctly.
What does it means when a share goes ex-dividend? Learn the important dates of a dividend, ex-divided, record date, payable date and ensure you receive your dividends.
Whether you've read about it in the finance section of the newspaper or heard it on the news, have you ever wondered what they mean by "The Market"? Why is it so important?
There are many benefits to investing in shares and we will investigate how this common form of investment can be an effective way to make money and dilute the risk.
There are 2 main types of brokerage firms, full service brokerage firms and discount brokerage firms (Online Brokers). Deciding which brokerage firm to use will depend on your trading style.
Step by step instructions on how to buy your first parcel of shares. Learn what 'Bid', 'Offer' and 'Last' prices mean and how you can take advantage of them with your trades.
The aim of StockWatch is to help beginner's learn about investing. These articles will teach you why investing is important, how to invest in shares, finding a broker & how to buy shares.