Share markets enable businesses, governments and organisations to raise capital, which can allow companies to expand their operations, invest in new infrastructure and ideally grow. In return for this capital, investors receive a ‘piece of the company’ by way of shares – which can be lucrative should the company be successful.
In addition, if a company decides it wants to raise money and have its shares traded on a stock exchange, it will sell shares to investors in what is known as an initial public offering (IPO)[7]. An IPO allows the company to become listed, raise capital or ‘payout’ the original owners or shareholders for their hard work in getting the company to its current stage, and continue its journey from there.
The share market has risks and is exposed to volatility and individuals, companies, institutions and governments can all realise large capital losses should the market turn against them or they make an informed investment.
The best advice is to seek advice, undertake education and speak to professional advisors before entering your journey on the share market.
[7] https://www.commsec.com.au/education/learn/investing-basics/how-does-the-stock-market-work.html