To maximise your savings, you may want to consider investing in the stock market of Australia. Before you start investing, there are a few things you should know about the stock market of Australia however. 

The more you know, the better you’ll be able to handle your finances in the long run, so read on below for more information. 

What is the stock market of Australia, and how does it work? 

To buy and sell shares in publicly traded corporations, investors use the stock market, which is also known as a stock exchange. You can conceive of a stock market as a “department store” for shares, or a “one-stop shop” for anyone who wants to buy or sell shares in any publicly traded firm in that market. There are a wide variety of stock markets around the world. Stock exchanges like the New York and London stock exchanges are among the most well-known, but Australia has its own. 

The Australian Securities Exchange (often referred to as the ASX) and Cboe Australia are two of the most well-known stock exchanges in the country. Share markets in Australia are responsible for a ‘primary market’, which allows corporations to generate money by issuing shares for sale, and a ‘secondary market’ in which investors can acquire and subsequently sell shares at market-determined prices. 

Australian law mandates that all stockbrokers provide access to both the buy-side and the sell-side of Australia’s stock exchange. 

What is a share? 

A share is a percentage of a company’s ownership (or ‘equity’). There are several elements that affect the value of your share, including the company’s earnings, its growth potential, industry trends and the current economic situation. 

What is a stockholder’s role? 

the stock market of Australia

A shareholder is someone who has purchased stock in a company. As a shareholder, you have a stake in the firm or asset, together with the other investors. Being a shareholder has its own advantages and disadvantages when investing in the stock market of Australia. 

If the company’s stock price rises, shareholders will benefit, and they will also be eligible to receive a portion of any profits that are distributed. You’ll also have a say in how the company or asset is run, vote on board decisions and get regular updates on the company’s success, so you can keep track of the value of your investment. 

Becoming a shareholder may come with additional obligations and rights, depending on the company or companies in which you decide to put your money. 

Taking a risk at the right time 

When it comes to the value of a share, not all areas of the market follow the same cycles. When the general stock market of Australia has climbed significantly and is primed for a correction, some stocks have a higher degree of risk. Alternatively, the market may begin to recover after a steep downturn. You should always conduct your own research and consult with a third-party expert before investing in stocks in the Australian stock market. 

Currency depreciations

The value of your investments could be adversely affected by currency fluctuations if you have any out of country holdings. This is due to the fact that any income you make abroad must be converted into Australian dollars when you bring them back home. 

Purchasing and selling share

You can either acquire shares directly from the firm when they are first offered to the public as part of the ‘float’, or you can buy them through a broker. You can also buy shares from other investors on the secondary market once the company goes public with its stocks.