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Introduction
Whatever your stage of life, you will have hopes and plans for your future. Your goals may be long-term and include financial well-being for you and your family or a comfortable retirement that doesnt rely on a government pension. Alternatively, you may have more immediate goals such as saving for a home deposit, setting up your own business or planning for your childs education. It is never too late to establish a regular savings plan and develop an investment portfolio.
The sharemarket provides one of the best opportunities to achieve your long term financial goals. And a significant advantage is that you can start small. Your initial purchase can be a parcel of shares valued as low as $500, although many advisers would recommend starting with at least $2000.
Half of Australias adult population – 7.3 million people (November 2002, ASX, Australian Share Ownership Survey) – have some exposure to the sharemarket, including 5.4 million who directly invested in shares listed on ASX, in 2000.
What is a share?
When you buy shares in a company, you own part of that company and may benefit by receiving a part of the profits (in the form of dividends) and by sharing in any capital growth in the value of the company.
The company benefits by raising funds (capital) to operate and expand its business without needing to borrow money to do so.
Better returns over the long-term
History demonstrates that shares, as a long-term investment, have the potential to provide better returns than any other major investment.
However, past performance is not a guarantee of future returns.
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