Making money on the stock market has helped many people to grow their wealth by investing in shares. We believe that investing in this are much better than any other asset class. This will enable you to diversify and it will in the long-term give you higher returns on investment. Another reason is liquidity and it also gives you the flexibility to spread your risk. Furthermore you can keep your shares  if you want to for as long as you like, gaining returns and benefit from company profits  and receive dividends. We advise you to prepare yourself and get knowledgeable about investing in shares because there are some investors who have lost a lot of money. Knowledge about investing in this way is the difference between success and failure.

As a shareholder making money on the stock market, it means that you are a part owner of a company and that you have a right to share in the profits called dividends. These are paid at the director’s discretion. Some companies don’t even declare dividends and use the profits to grow the business. The money are made by shareholders in two ways: by receiving dividends and by selling at a higher price than they initially paid. You also have rights like attending and vote at the company’s annual general meeting, receive interim and annual reports, receive a share of profits and sharing in the underlying assets if the company is liquidated after paying all the other creditors. You also have limited liability which means that you are not personally liable if the company can’t pay its debts. In this way you cannot lose more than the amount that you paid for the share.

There are short-term events that can trigger share movements: company news like top executives buying aggressively, publicity for the industry, manipulation by speculators, global events and trends. Economic conditions like the inflation rate and interest rates also have an influence, international conflicts and political uncertainty, speculation and rumors, natural catastrophes like hurricanes or tsunamis and when there are more buyers than sellers. In the long-term the performance of a company plays a major role, when it performs well the demand for shares exceed supply and a higher price is paid by investors, when it does not perform well, people start to sell and look for other options. You can also invest in individual shares. It can be daunting but has the possibility to make money, like ETF’s, unit trusts and equity linked fixed deposits. Making money on the stock market can be very profitable, but remember knowledge is the key, you can get all the information on the Internet.