All about shares
In terms
of an investment, shares are a unit of ownership in a company which entitles
the shareholder to a portion of the profits distributed by the company.
Business owners
generally own the shares in their business, but for the majority of non-business
people, the opportunity to own shares is either directly in your own name, or indirectly
via your superannuation fund, and these usually invest heavily in the shares of
different companies.
You can
also invest in managed funds, exchange traded funds, or listed investment
companies. Investing in this way pools
your resources with other investors and allows you to potentially invest in many
listed shares, however, there are additional costs to consider with these
options such as investment management fees.
Shares
are generally longer term investments as their value can fluctuate both up and
down. If you are prepared to invest for the long term, and accept some risk and
volatility, then shares can be excellent investments.
In terms
of which shares to buy, you should do your homework, or alternatively speak to
your financial adviser. There can be
other benefits of owning shares and where to hold them, such as to reduce the
amount of tax you pay on the profits. A
financial adviser would be able to help you in this sort of situation.
Make sure you check out Sally Tyrie's Q&A on All about shares to find out more.
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