I want to invest in shares but I’m not sure what the Sharemarket is and how it works


Q

I want to invest in shares but I’m not sure what the Sharemarket is and how it works

A

A Sharemarket (also known as a Stockmarket) has 2 main functions:

  1. It enables people to invest in a company.
  2. It provides a means for people to buy and sell shares between themselves as shareholders and investors.

If I am a private citizen who owns a business and I am selling my business to other private citizens in the community, I might do the whole thing by word or mouth or by placing an ad in the newspaper. This makes selling the shares easy for me. However, it can create a problem for other investors who may also want to sell their shares in the same business. They have to go out and find buyers, which can be difficult.

A Sharemarket solves this problem.The Sharemarket is the place where the forces of supply and demand are expressed and translated into the daily share price belong...

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