Companies sell shares to raise capital for growth and expansion, thereby giving shareholders partial ownership of the company.
Shareholders buy and sell shares through stock markets and the values of shares change daily, so shareholders try to buy shares when they are low and will try to sell them when the price increases, to make a profit.
Some companies pay dividends to shareholders based on the amount of profit they make.
Australian- listed companies, trade through the Australian Securities Exchange, which lists more than 2,000 companies.
Before the internet, the only way to buy or sell shares was through a stockbroker.
Online trading means investors can buy and sell shares in Real Time.
To buy shares online, you will need to create an account with an online trading platform and there are fees involved.
Each transaction typically has a brokerage fee ranging from $5 to $25 for ASX trades.
The standard operating hours for the ASX are 10am to 4pm AESTA Monday to Friday.
As well as shares, index funds can also be traded and there is a minimum of $500 for every order when buying shares on the ASX.
Typically, Blue Chip shares are large companies with a solid track record of producing good earning. Investing in Blue Chips is a good strategy for beginners, as they are considered stable and have been in the market for a long time.
When choosing a share trading platform, consider the following before making a decision:
- Research and compare commission fees
- Look for platforms that offer market news & updates & research tools
- Look for platforms that allow you to transfer money into a high interest savings account
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