SERVICES · LISTED MARKETS

Stocks & Shares

Listed shares give investors part-ownership in publicly traded companies. FPW monitors Australian and global markets and provides research-led information to help investors understand opportunities, sectors and market conditions.

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01 / FUNDAMENTALS

What are stocks
and shares?

A share — also called a stock or equity — represents part-ownership of a company. Shareholders participate in the company's fortunes through changes in the share price and any dividends it pays, and may have voting rights on certain matters.

Shares are one of the principal growth asset classes and have long formed part of many investment portfolios.

02 / MECHANICS

How share
markets work.

Companies list on a securities exchange so their shares can be bought and sold between investors. Prices are set continuously by supply and demand and respond to company results, announcements, interest rates, economic data and investor sentiment.

Investors typically trade through a broker or platform. On the ASX, trades generally settle two business days after the trade date.

03 / MARKETS

Australian and
international markets.

The Australian market provides access to local companies across sectors, but it is relatively concentrated in financials and resources. International markets offer exposure to industries, companies and economies that are less represented locally.

Investing internationally introduces additional considerations, including currency movements, different regulatory environments and time-zone differences.

04 / RETURNS

Two sources
of return.

Capital growth

An increase in the share price above the purchase price. It is realised only on sale and can reverse — prices can fall below what was paid.

Dividends and income

Distributions of company profits. Not all companies pay dividends, and they can be reduced or cancelled. Australian dividends may carry franking credits.

05 / PORTFOLIO

Diversification
and volatility.

Share prices can move significantly over short periods. Holding a range of companies across sectors and markets reduces the impact of any single company, but does not remove market-wide risk.

Because of this volatility, shares are generally considered better suited to money that will not be needed for several years. Past performance is not a reliable indicator of future performance.

Wealth Management

06 / TIME

Long-term
investing.

A long-term approach allows investors to look through short-term market movements and focus on the underlying performance of businesses over time. It also reduces the pressure to time market entry and exit — something even professional investors find difficult to do consistently.

07 / APPROACH

Individual shares vs
diversified investments.

Individual shares

Direct ownership of chosen companies. Offers control and transparency, but concentrates risk and requires time to research and monitor.

Diversified investments

Managed funds and exchange-traded funds spread exposure across many companies in one investment, typically with a management fee.

08 / RESEARCH

Researching
a company.

Factors investors commonly consider include:

Revenue

How the company earns money and whether sales are growing.

Earnings

Profitability and the consistency of profits over time.

Debt

The level of borrowing and capacity to service it.

Cash flow

Whether reported profits convert into cash.

Competitive position

What protects the business from competitors.

Industry

Sector structure, growth and risks.

Valuation

How the price compares with earnings, assets and peers.

Management

Experience, track record and alignment of leadership.

Growth prospects

Realistic opportunities for future growth.

AT A GLANCE

Australian equities

Companies listed on the ASX across a range of sectors and market capitalisations.

International shares

Exposure to global companies and markets beyond Australia.

Sector research

Insight into industry trends, company fundamentals and valuation considerations.

Market monitoring

Ongoing observation of market movements, announcements and economic conditions.

FREQUENTLY ASKED QUESTIONS

Stocks & Shares
questions.

What is the difference between a stock and a share?

In everyday use the terms are interchangeable. Both refer to units of ownership in a company.

How do I buy shares in Australia?

Shares are generally bought and sold through a broker or online trading platform that provides access to the ASX or other exchanges.

Do all companies pay dividends?

No. Many companies, particularly those focused on growth, reinvest profits rather than paying dividends. Dividends can also be reduced or cancelled.

What are franking credits?

Franking credits reflect tax already paid by an Australian company on its profits. They are attached to franked dividends and may be relevant to a shareholder's tax position.

Can I lose money investing in shares?

Yes. Share prices can fall, sometimes significantly, and a company can fail entirely. Diversification and a long time horizon are commonly used to manage these risks.

Should I invest in Australian or international shares?

Many investors hold both. Australian shares provide local exposure, while international shares can broaden sector and geographic diversification. The appropriate mix depends on individual circumstances.

Does FPW recommend specific shares?

No. The information on this website is general and educational. It does not recommend any particular security or take into account your personal circumstances.

From FPW
Insights.

STOCKS & SHARES: Stocks and Shares: A Beginner's Guide →
WEALTH MANAGEMENT: The Role of Diversification →
INVESTMENT EDUCATION: Understanding Investment Risk →

ImportantInformation on this website is general in nature and does not take into account your objectives, financial situation or needs. Investments carry risk, including the possible loss of capital. Past performance is not a reliable indicator of future performance. Consider seeking independent professional advice before making an investment decision. Key considerations: Share prices can fall as well as rise; Markets can be volatile; Consider your time horizon.

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