Shares confer ownership of a part of a company that is able to be readily traded. When you purchase a share, in effect you are purchasing a portion of the company. This means that you may be able to profit from the company’s profit which may be forwarded to you on an annual basis in the form of a dividend. Furthermore, as the company performs better and increases in value, the owner of the share will benefit from the capital growth of the share. Below are some of the benefits and disadvantages that may stem from investing in shares:
- Ease of buying and selling – Due to the large number of people buying and selling shares it is often (but not always) easy to sell a share in a Company The ability to earn an income through a paid dividend which may also have tax benefits
- Ability to control and know exactly what you are investing in
- The share market can often fluctuate substantially (even on the same day) and so your investment is not considered stable
- Companies can choose not to pay dividends in a given year. For example, QANTAS did not pay dividends to shareholders in the 2009 – 2010 financial year
- A substantial amount of dedication into keeping up-to-date with the state of the market and company is required to ensure that you are able to act upon market or company changes which may affect the value of the shares
Navado Financial Advisors Pty Ltd is a Corporate Authorised Representative of Lifespan Financial Planning. A.B.N. 23 065 921 735. AFSL 229892. This webpage (and any material or wording appearing on this webpage) is provided for information only and constitutes general financial product advice. It does not take into account your objectives, financial situation or needs and you should therefore consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before acting on this webpage. When making decisions about any financial products you should obtain a copy of and consider the Product Disclosure Statement for that product before making any decision. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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