Are you going to make regular contributions?.How long do you want to put money into the stock market for?.Thinking about why you want to invest can help you work out your strategy and avoid making irrational decisions down the track.
It’s true that savings accounts and term deposits are a less risky type of investment, and it is generally recommended you keep some of your money in these assets.īut investing in shares can give your money the chance to earn better returns than it would if you left it in a bank account. Isn’t my money safer in a savings account? Companies don’t have to pay dividends, but many see it as a way of returning earnings to their shareholders. Conversely, it’s important to remember that if the share price falls below the amount you paid and you sell your shares at this lower price, you would lose money.Ī share in the company’s profits. Usually known as ‘dividends’, these payments are a portion of company profits paid out to shareholders, usually twice a year. People aim to make money from investing in shares through one, or both, of the following ways:Īn increase in share price. Usually known as ‘capital growth’ or ‘capital gain’, all this means is that you make money by buying your shares for one price and selling them for a higher price. You need to use a third party, called a ‘broker’, to conduct the actual transaction of buying or selling shares. When you buy shares in one of these companies - even a very small number of shares - you then own a small part of that business.
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