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What Are Shares?

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Shares, also called stocks or equities, are simply part-ownership of a company.

Shares 101

Shares represent an ownership stake in a company, similar to the way you would own a house.

But a public company on the sharemarket can have hundreds of thousands of other shareholders just like you. 

Companies can also use debt, which is just like the mortgage on a house.

If a company goes out of business, the banks and other owners of the debt get their money before you do. It’s the same as if you sold your house, the bank would get its money first.

Why do companies issue shares?

Companies offer their shares on the sharemarket to raise money, by issuing shares to investors for cash, which it then uses to invest in growth opportunities and projects.

Why do people invest in shares?

Over the long-term, most people invest in shares for capital growth (share prices going up) and dividend income.

However, shares are considered higher-risk investments than other investments like government bonds, so it’s best to speak to a professional or do your own research before investing in shares. 

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Owen Raszkiewicz

Owen Raszkiewicz

Owen is the Founder of Rask, Lead Investment Analyst for Rask Invest and head educator at Rask Education. Prior to founding Rask, Owen was an investment analyst at the highly regarded managed funds research business Zenith Investment Partners and a Writer/Analyst for The Motley Fool Australia. Owen’s formal qualifications include a Master of Applied Finance and Master of Financial Planning from Kaplan Professional, Bachelor of Technology (Information Systems) from Swinburne University of Technology, Advanced Diploma of Financial Services (Financial Planning) and Diploma of Mortgage Broking Management. He's also completed level 1 of the Chartered Financial Analyst (CFA) program.

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