How to Understand the Australian Share Market

There are huge amounts of investment that come into Australia, and the top two nations that contribute towards this are the US and the UK. In fact, in 2020, $4 trillion worth of investments came into Australia from foreign nations.

So, if these guys believe in our economy, don’t you think it’s time you did? Well, if you are interested in Australian investments, the first thing you need to do is understand the Australian share market.

In this brief guide, we’ll take a look at the fundamentals, to get you started on your Australian investment journey. Now, let’s jump into it!

What Are the Australian Share Markets?

A share market, in general, is a place where entities can buy and sell shares of publically traded firms. Another name for a share market is a stock market or stock exchange. One important factor to know is that the transactions are transparent in such a marketplace.

There are many stock markets around the world. Some of the most notable ones are The London Stock Exchange and The New York Stock Exchange, for example.

You can compare these markets on a micro level to a department store, for instance. They of kind of like a one-stop shop where you can buy shares in companies from particular economies.

In Australia, there is the Australian Securities Exchange. There’s also the Chi-X. By law, all stockbrokers should allow sellers and buyers access to these markets in Australia. And nowadays, a lot of foreign investments come into these markets.

What Are Shares?

Put simply, a share is a portion of a company that you can buy and own. The company has to be public, however.

Your shares in a company can rise and fall in value due to several factors. For example, predictions of future growth can raise share values. The values raise because there will be a higher demand for these shares. On the flip side, if the economy is looking bad, the demand to buy shares may drop, meaning they lose value.

As an investor, in basic terms, you are looking to speculate that the shares you buy will go up in value. There are instances where you might predict the opposite and make money this way too.

What Shares Can You Buy?

In order for you to buy shares, you need to go through a stockbroker. In the past, the average person may have been limited to which shares they could buy. These days, due to online platforms, you can pretty much buy any shares you like!

The crucial thing, though, is to find a reputable broker that will suit your investment needs. We recommend you take a look at: www.monexsecurities.com.au.

Make Wise Australian Investments

To make wise and robust Australian Investments, knowledge is king! If you choose the wrong investment platform and don’t research the shares you are interested in, it could all go pear-shaped. Instead, take your time, and gain as much advice as you can.

Check out more tips advice on our main blog page.