Learning about the stock market isn’t difficult, with the mechanisms not being as complex as you might think.

A stock market is a public market for the trading of company stocks and derivatives at an agreed price. These are reflected as securities listed on a stock exchange as well as those only traded privately. Stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organisation, whose job it is to bring together the buyers and sellers.

Major countries have their own stock exchanges, and ours is the Australian Stock Exchange (ASX). The Aussie sharemarket doesn’t have a physical trading location, such as a trading floor. You instead buy and sell shares using a computerised trading system which links stockbroking firms
around the country.

Learning about and understanding the stock market can be an important tool for you to make money, as history suggests that Aussie shares have performed other types of investment over the long-term.  There are over 1500 companies on the ASX, covering most sectors of the economy, including financial services, industrials and healthcare.

If you decide to invest in the stock market, you can decide how much money you invest, into which companies and which sector, thus controlling your future. As you learn more about the stock market and understand how it works, you’ll be able to decide what shares you want to buy, and what shares you’ll want to sell or hold. When you buy or sell shares, your orders are entered into the computerised system at your stockbroking firm. The system finds a seller in the market that is willing to trade shares for the price you want to buy them. Your order is then placed in the order it is received, and voila! – you’ve made a footstep into the stock market.

Learning about and understanding the stock market is easy. For more information, you can visit our website, check out the education centre at the ASX website or speak to your broker if you open an account.

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