What are shares?

Submitted by Share Trading on 13 January, 2010 - 22:40

Learn what shares are

You are probably wondering what are shares? A share is simply part ownership of a business. If you invest in shares, stocks, securities or equities – as they are sometimes called – you are buying part ownership of the company’s business and become a shareholder in that particular company

Obviously you then have a vested interest in the fortunes of that company and hope the business will grow and prosper, together with your equity in its future. If it does then you may get to share in its profits. These profits are paid out in dividends and are your reward for investing with the company.

As an owner of the company's shares, you could also have a say at Annual General Meetings (AGMs) and depending on which company you choose to invest with, could also receive shareholder discounts and other incentives.

Shares that have been issued to investors by a company listed on ASX can be sold to other investors on the sharemarket. In this way, if the company prospers, shareholders can make a profit by selling their shares for more than they paid for them.

The Australian Stock Exchange operates a sharemarket in Australia, providing a transparent and regulated environment where companies and investors can come together. Over 1600 Australian companies and 70 overseas companies are currently listed on ASX.

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