Investing in the Stock Market -- Lesson 1
January 21st 2008 09:52
Investing in the stock market is not just exciting – it can also be profitable – as it is for me. You just have to understand it. In this series I approach the basics of share investing made easy. All you can read bellow has an Australian perspective.
The Stock Market
What is the stock market? Basically, it is a place where to buy and sell securities. These securities are: shares, warrants, options, etc. It is not a physical place, though, such as a market fair.
As a matter of fact, all trading and settling of shares in Australia is done through the Australian Securities Exchange (ASX) via a computer system called CHESS. This is operated by authorised traders around Australia who place buy and sell orders in it. The ASX web address is: http://www.asx.com.au/.
You can use the Internet to look for discount traders, but the cheapest of them is JDV which you can find at this web address: http://www.jdv.com.au/. JDV charges $17.99 for each trade up to $5,000. Another trader much in demand is CommSec whose address is: https://www.comsec.com.au/.
A share trade must be done for the minimum of $500 for purchases. This compares with the amount you would have to put up for a property purchase.
What is a Company?
A company is an entity with a life of its own. A company is distinct from sole tradership, partnership and trust. A company, as an entity, can trade, accept liabilities and own property as an individual would.
The most striking aspect of a company is that it has limited liability. This means that, upon liquidation, its assets – and nothing more – answer for its debts.
Each company listed on the ASX has a three letter code based on its name such as CDO for Colorado Group Limited. This code must be provided for share trading purposes.
A company’s life, from formation to closure, is regulated by the Australian Securities and Investments Commission whose web address is: http://www.asic.gov.au/asic/asic.nsf/. The ASIC, in its own words, “enforces and regulates company and financial services laws to protect consumers, investors and creditors”.
The Stock Market
What is the stock market? Basically, it is a place where to buy and sell securities. These securities are: shares, warrants, options, etc. It is not a physical place, though, such as a market fair.
As a matter of fact, all trading and settling of shares in Australia is done through the Australian Securities Exchange (ASX) via a computer system called CHESS. This is operated by authorised traders around Australia who place buy and sell orders in it. The ASX web address is: http://www.asx.com.au/.
You can use the Internet to look for discount traders, but the cheapest of them is JDV which you can find at this web address: http://www.jdv.com.au/. JDV charges $17.99 for each trade up to $5,000. Another trader much in demand is CommSec whose address is: https://www.comsec.com.au/.
A share trade must be done for the minimum of $500 for purchases. This compares with the amount you would have to put up for a property purchase.
What is a Company?
A company is an entity with a life of its own. A company is distinct from sole tradership, partnership and trust. A company, as an entity, can trade, accept liabilities and own property as an individual would.
The most striking aspect of a company is that it has limited liability. This means that, upon liquidation, its assets – and nothing more – answer for its debts.
Each company listed on the ASX has a three letter code based on its name such as CDO for Colorado Group Limited. This code must be provided for share trading purposes.
A company’s life, from formation to closure, is regulated by the Australian Securities and Investments Commission whose web address is: http://www.asic.gov.au/asic/asic.nsf/. The ASIC, in its own words, “enforces and regulates company and financial services laws to protect consumers, investors and creditors”.
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