Your guide to stock investing
What are stocks?
When you invest in stocks, you become a part owner of a company.
The aim of stock investing is to benefit from the company’s future success through a higher stock price (capital growth),
as well as receiving part of the company’s profits as income (dividend).
Stocks are also referred to as ‘stocks’ and ‘equities’, however they all refer to the same type of investment.
Three reasons to invest in stocks
History shows that stocks offer the potential for long term capital growth, despite regular ups and downs.
If you’re saving for something years away, you could achieve your goal faster than using a bank account.
You could receive dividends (a share of profits) that could provide an income or be reinvested.
How to invest in stocks?
Some investors like to buy individual stocks, often in large, familiar companies that they know and trust, through an online trading account or stock broker. However, investing directly in a company can be complicated, as each investment requires extensive knowledge, research and ongoing monitoring.
That’s why many investors – particularly those lacking the time to research individual companies – prefer to invest in stocks through a managed fund. A managed fund is where your investment is pooled with other investors and spread across a portfolio of stocks, which is then overseen by a professional investment manager.
Things to consider when investing in stocks
- While stocks offer the potential for higher returns than cash and bonds, they are a riskier form of investment, and you may get back less than you invest.
- Stock prices can also be volatile at times, which means the value of your investment will go up and down.
- The value of the income you receive as dividends may also go down, as well as up.
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Harness our expertise in Asian equities
We’ve been investing in Asia for almost 50 years. This long history gives us an in-depth understanding of Asian equities, which is evident from our performance across all market cycles.