Shares are bought to earn profit either by dividends or by the growth of share price in the market or even because of both the reasons. Shares can be bought or sold on the Australian stock market too. One doesn’t need a lot to invest in shares, they can start by investing as little as $500. Investing in shares is always a risk factor; hence one must do a good research work before investing in the market.
When one is investing in quality Australian stock market it means they are buying the ownership of a portion of the company listed in the Australian exchange. If the company does well, the investors benefit as they share the profit. But if the company suffers loss, the investor’s too has to face the loss occurred as the value of the shares decreases and the company doesn’t pays any dividend.
An individual investing in australian stock market (ASX) trades on the companies listed in the Australian stock exchange. One can even trade through brokers whom the individual gives the authority to trade on their behalf. One can even trade online with the online trading facility of the stock market. Some important things to know to trade in ASX are-
• Capital growth – it means the overall value of the shares has increased resulting in a profit to the investors but there can also be a loss, and the value of the shares can decrease too. So, one must study the market carefully before investing and keep a close tab on their portfolio.
• Dividends – it is the amount which the company pays to the shareholder in case the value of the share goes up. Different companies have different rules regarding the dividends -some pay it periodically some pay it occasionally some don’t pay it at all. And some allow you to reinvest the dividend in the shares while some offer tax benefit on the dividends.
• Buying and selling – of the shares occured through the brokers on the listed companies in the Australian Exchange. The brokerage fee is fixed in advance or a small percentage of the trade goes as the fees.
• Risk factor – Share trading has its own shares of risk involved in the business. As it’s said to reduce the risk factor one must avoid keeping all the eggs in one basket. One must never invest only in one company or sector. A loss in one particular sector may mean a huge loss if one has invested only in one sector hence one must invest in different companies in different sectors.