• publish

Investing in shares

Wanting to learn more about the features, risks and benefits of investing in shares?

Why buy and sell shares?

You can use shares to help you build wealth. You can do this in two ways:

  • buy shares at one price and sell at a higher price; and
  • earn income in the form of dividends from your shareholding.

Like any investment, shares have risks you need to understand before trading. You should seek independent advice from a professional adviser before making a decision.

A share price generally goes up because people value the shares in that company and offer increasingly higher prices to buy them. A share represents a part ownership in a company. If the company performs well, you can benefit from share price growth, income paid as dividends or both. There is no guarantee your shares will rise in price while you own them or that the companies you invest in will prosper.

Shares can also be used to bring diversity to your investment portfolio and play a part in your overall investment strategy. 

Small group seated at an outdoor table with notebooks, takeaway cups, and a tablet visible, presented as a general visual representation of investing research and discussion.

What type of shares are there?

There are three different types of shares traded on ASX, each with their own characteristics. Understanding the differences between them is important as you make your investment decisions, since these characteristics can affect the way you decide to invest. 

How can you identify different types of shares?

The quickest way to identify whether a share is anything other than an ordinary share is through its ASX code.

Every product traded on ASX has a unique identification code which is displayed on ASX ticker boards and in media sharemarket tables. All securities issued by a company will incorporate the company's code. For example, the code for any security issued by Commonwealth Bank of Australia will include the code ‘CBA’.

The code for the ordinary shares of an ASX-listed company is the same as the company code, with three characters. If there are more or fewer than three characters in the code, the security is likely to be something other than an ordinary share. 

For example, preference shares usually have a five letter code consisting of the company code and a two letter suffix, generally PA-PZ. Partly-paid shares usually have a five letter code consisting of the company code and a two letter suffix, generally CA-CZ (except CP).

Looking for more tips and tools?