Shares

A share is essentially a share in a company; if you own a share you own a tiny part of that company. Shareholders are entitled to take part in decision making processes regarding the running of the company: the more shares you own, the more control you have. For this reason it is common for company directors to own a large amount of the company shares. When you buy a share in a company you will be issued with a share certificate to prove your ownership. You can purchase shares in any public company through a stockbroker. These shares are traded using the stock market, and depending on economic conditions and the estimated value of the company itself, the price of the shares can rise or fall.

When a company is making a lot of money its directors can agree to pay the shareholders a share of the profits in the form of a dividend. There is no guarantee of a dividend, just as there is no guarantee that a company will make a significant profit. If you do not receive regular dividends from your investment, you can make good returns by selling your shares when they have risen in value. Remember that there is no guarantee of a profit, and it is not uncommon for shares to lose value significantly or altogether. Do not invest any money in shares that you cannot afford to lose. The basic idea of share trading is to buy cheap shares and sell them when they have increased in value: the difference in price is your profit, and a lot of profit means you have made a good return on your investment. It can take a lot of expertise to buy and sell shares at the correct time, and you will need a lot of time to follow the markets and easy access to your stockbroker. For this reason it may be best to employ a professional to monitor your investments or invest in a ready-made portfolio offered by a high street bank.