Stock market investment gives you the unique opportunity to take a direct part in the growth and success of companies. When you buy shares in a company, it means that you actually own a portion of that company. As part owner, you benefit by receiving part of the profits or dividends and sharing in the growth of the value of the company.
The company benefits by raising funds or capital when your shares and other shares are first sold. These funds are used to operate and expand the business.
In general, share investments produce better returns than fixed interest investments, particularly when money is invested long term.
Although there are rises and falls in the stock market, history shows that over the long term, the value of the stock market rises. In the US, which has a long history of deregulated stock market, the average real return per annum after inflation is approximately 10%.
Direct investment in the stock market also gives you control over where you put your money. You decide which companies you want to invest in and when the time is right for you to see your shares. If you want to be in control, stock market investment is a good option.
Another attractive feature of stock market investment is the flexibility to change your investments when your personal circumstances change. For example, if you need money for a well-earned break, an extension on our house or your children's education, all you need to do is sell your shares.
Stock market investment allows you to follow your investment. You'll receive regular information from companies you invest in and can attend meetings. This enables you to gain a unique insight into the results and strategies of the organization and learn a lot in the process.
Market investment also allows you to follow a particular interest you have. For example, you may have lived all you life in a forestry area and are interested in supporting this industry and benefiting from its success, by investing in listed forestry stocks.