Investment

Congratulations on finding your first place to explore the idea of shares and the stock market.

Here you will find information about making your first steps to understanding how the share market works and how it can work for you.

I started my first investigations into the stock markets in 2016 and I wish that I had been informed more about the stock market in my younger years. Hopefully in time we can change the education of younger people and move towards a society that is able to discuss finances.

Below you will find information about how I view the stock exchange from my experience. It is designed to share information about ‘what’ this investment is and is designed for an overview only. Happy reading!

What is the stock market?

The stock market is a place where public companies can come to find investors to help fund their projects. A company decides that it needs financial support and then lists their company on a stock exchange (there are multiple stock exchanges throughout the world). This then allows investors the opportunity to buy into part of the company with a price determined by the company (share price value).

Example: A small company that has one shop in Auckland, New Zealand and would like to open a second store in a different location. The owner of the company sees that there is a demand for their product/service in the new location and does some research and has evidence of a positive future venture in the new location. They would then list their Auckland based company as a public trading company and request a stock code from the New Zealand Stock Exchange. They would then have an Initial Public Offer (IPO) to introduce the company to investors in New Zealand. The company would be able to present their current company and what they would like to do in the future by using a Prospectus of the company. Within the prosepectus, the company would list information about where the company started, what the future plans look like for the company and how investors could benefit in the future.

The company has its terms and conditions itemised within the prospectus. It gives time lines for the intial public offer and when the shares will be allocated to the investors whom have applied and paid for shares. It should also include information about the intention of the business and forward looking plans and the documentation