How To Get Started In The Share Market

Posted by JulyRed on May 27th, 2014

Share trading is no longer reserved only for the professionals and the super rich investors. Did you know that over 40 per cent of Australians adults hold shares? The share market provides some of the greatest opportunities to achieve long-term investment goals. And, if you were wondering how to get started in the share market and how to buy shares, know that it is accessible to most and with some education you’ll get started in no time. Below we will review some of the key elements you need to know and consider before investing your hard earned cash into the share market.

Australia is among one of the leading countries for share ownership in the world. More and more people are now thinking how to buy shares or how to get started in the share market and buying shares as a considerable part of their investment portfolio. Given this background, proper education and guidance can protect you with the right risk management strategies. The first thing that you learn is what is a share? It is part ownership of a company. When a company decides to raise money, to fund its business they ‘go public’, i.e., to list it on a stock exchange. Then they issue shares to the investors. When you purchase a share of that company you become a part owner of the company. The money raised in this way is known as equity capital. For purchase the shares each shareholder receives dividends or some other benefits from the company.

Shares that you have bought of a listed company can be bought and sold to other investors on the share market. So, if the price of the share has increased you can sell them, making a profit by getting more than you paid for buying the shares. There is an authorised body in every country to operate the share market and regulate its operations. For Australia it is the Australian Securities Exchange or ASX. It is unbiased towards companies and investors and looks after the benefits of both. So if you want to know how to buy shares or how to get started in the share market you will have to know about the rules and regulations of the share market to know what you can do legally and what you should not.

Before you ask how to buy shares or how to get started in the share market it is good to lower your risk by making sure there is ‘diversification’ in your portfolio. You should not put all your eggs in one basket. For example if you invest in a tech company you’d also want to invest in something that’s totally unrelated such as mining, giving you a spread of assets and lowering your risk. Diversification helps as part of your risk management. This is usually covered in a stock selection course. 

You will also need to consider your tax implications; this is where a tax professional will be able to help you. You need to consider the risk of investing, your personal situation and financial goals before you start. Knowing how to buy shares or how to get started in the share market will give you the keys to making better decisions in buying and selling shares. The right investment education is essential to making the appropriate decisions in the markets.

Consult some good blog articles if you want to know how to buy shares and how to get started in the share market.

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Joined: January 24th, 2014
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