Equities
Investments which are usually classified as equities are those that you own directly. The two main types of equities are ordinary shares and property.
Ordinary Shares
When you purchase or invest in ordinary shares of a company you are actually becoming a part owner in the business. As a shareholder you take on the risks and responsibilities of ownership of the company. You will receive information about the company including annual and financial reports which allow you to review how your company is performing. You can attend annual meetings and participate in the election of directors who will make the major business decisions for the company. You will also be able to share in any capital growth and profits the company makes. These can be in the form of dividends or increased value of the shares.
Shares are bought and sold on stock exchanges and the price of an individual share can go up and down when it is affected by a range of forces including:
* the profitability of the company;
* the current Australian economic situation, for instance if the current interest rate is high people will move money out of ordinary shares and into cash management and term deposits. This means there are less ordinary share buyers in the market and this can decrease the price of the shares;
* the global economic situation. You probably have heard the saying “the US coughs and we catch cold”. Reasons for this include large institutions and fund managers buying shares across the globe and in most major sharemarkets. They buy parcels large enough to move a sharemarket or a company’s share price up or down;
* the general perception buyers have the company; and
* the general perception buyers have of the overall market (often referred to as market sentiment).
The market is complex and you should have knowledge of the management of the company, the industry the company works in, its past history and any major potential changes which may affect your investment. This can be very time consuming and difficult to cover. We can assist you with all your requirements for buying this form of investment. We also ensure that your total portfolio is managed to minimise risks while creating wealth over the medium to longer term.