A stake in the business

Investing in shares will make you part-owner of a business. Shares can be a sound long-term investment but are very risky to use in the hope of making a quick buck.

Shares may also be referred to as stocks, securities or equities.

MoneySmart has information on different aspects of investing in shares.

Benefits of investing in shares

The benefits of investing in shares are:

  • Potential capital gains from owning an asset that can grow in value over time
  • Potential income from dividends
  • Lower tax rates on long-term capital gains

Video: Luke invests in shares

How I started investing video

Find out how school teacher Luke starts investing in the stockmarket in this MoneySmart Teaching video.

Risks of investing in shares

The risks of investing in shares are:

  • Share prices for a company can fall dramatically, even to zero
  • If the company goes broke, you are the last in line to be paid, so you may not get your money back
  • The value of your shares will go up and down from month to month, and the dividend may vary

Buying and selling shares

The most common way to buy and sell shares is on the share market using a broker or broking service. See how to buy and sell shares for more information. 

If you are new to shares, you might like to try the ASX's free online shares course.

Choosing shares

Choosing shares to buy and sell requires time, research and analysis. However, if you're willing to put in the time and keep an eye on the market and economy, building a portfolio of shares can be rewarding.

See choosing shares to buy for more information.

Managing your shares

If you own shares, it's important to keep up with how they're performing compared to similar companies and the market as a whole.

See keeping track of your shares for some things you should do regularly to manage your shares.

Buying shares is a good way to build your wealth over time. As with other investment options, shares are not without their risks. Think carefully about your options and seek financial advice before you enter the share market.

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Last updated: 11 Dec 2018