Investing In Shares

Investing In Shares Benefits

When investing in shares you are purchasing a portion of the firm and participating in dividends issued and capital growth enjoyed by the company. Why choose investing in shares over other forms of investment? There are number of investing in shares benefits including:

  • Liquidity. When investing in shares you have access to your cash within three days. Compare this outlook with other investments such as real estate.
  • Flexibility. When investing in shares an investor can spread their risk over a number of companies in whatever combination of stability and speculation with which they are comfortable.
  • The Australian Stock Exchange provides a secure and regulated environment for investing in shares participants.
  • How Do I proceed Investing In Shares?

    A minimum of $500 plus brokerage is required to start investing in shares. Expert professional advice is essential for the beginner. Consult one of the many listed Stock Exchange brokers before investing in shares. Shares can be bought and sold on line but this is not recommended for the inexperienced participant.

    Who Is Investing In Shares?

    Broadly speaking we can place investors into two categories.

    1. Short term investing in shares.
      Speculators looking for volatile stock and aiming to be in and out of the market quickly.
    2. Long term investing in shares.
      Long term investors desiring dividend income, franking credits (tax offsets) and capital growth.

    Investors of course frequently choose a combination of short term and long term investing in shares.

    Can I Borrow To Finance My Share Purchases?

    Yes! You can borrow to finance investing in shares. Traditional lenders will provide loans for share purchases against suitable collateral. If your stress level is high enough look into margin lending for investing in shares.

    Things to Remember When Investing In Shares

    There are number of things you should remember when investing in shares:

    • As with all investment decisions do your homework first, be well versed and well informed.
    • Look into the tax implications of being a day trader as distinct from an investor looking five to ten years ahead.
    • Long terms 'blue chip' (top shelf) stock are an excellent hedge against inflation when investing in shares.
    • The stock market is volatile there are always risks for the unwary people investing in shares.
    • Until you become experienced and 'educated' use a broker to invest in shares.
    • Have clearly in mind what you wish to gain from your investing in shares. Is it income, capital growth or are you prepared to risk your capital for quick returns?
    • Historically, long term investing in shares have been most rewarding with 'time' substantially reducing the risk of negative returns.