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Understanding Shares As An Investment Teams

The document explains shares as an investment option, highlighting their role as proof of ownership in a company and the process of buying and selling shares on stock markets. It discusses the benefits, such as potential high returns and dividends, as well as risks like market volatility and poor company performance. Additionally, it emphasizes the importance of diversification and long-term investment strategies to mitigate risks.

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seleen salhieh
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11 views14 pages

Understanding Shares As An Investment Teams

The document explains shares as an investment option, highlighting their role as proof of ownership in a company and the process of buying and selling shares on stock markets. It discusses the benefits, such as potential high returns and dividends, as well as risks like market volatility and poor company performance. Additionally, it emphasizes the importance of diversification and long-term investment strategies to mitigate risks.

Uploaded by

seleen salhieh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Business Investments –

Understanding shares as an
Investment option.
Learning Objectives
- To understand the concept of Shares as an investment option.
- To analyze the benefits and risks associated with investing in
shares.
- To compare shares to other investment options such as Real
Estate, Mutual funds, and Bonds
Analyze the following picture. What
comes to your mind? What do you think
is happening in the picture? Can you
relate this picture to any real- life
situation eg restaurant, Business etc?
Shares as an investment option for businesses.
Shares - Is a proof of ownership of part of a company. When you buy shares, you
become a Shareholder.
- When companies want to raise money for e.g for expansion or projects they sell
shares ( units of itself) to investors.
•-Dividends: Shareholders may receive a portion of the company's profits as dividends.

-A speculator might want to buy shares at a lower price and later sell at a higher price.
-The more shares you own the greater the portion that you own of that company.
Inquiry Based Questions?
•Question 1: What factors should you consider
before investing in a company's shares?
•Question 2: How can diversification help
mitigate the risks associated with investing in
shares?
•Question 3: What are the potential benefits of
holding shares for the long term?
•Question 4: How do economic conditions affect
the stock market and share prices?
How it works?
• Stock Market: Shares are bought
and sold on stock exchanges (e.g.,
NYSE, JSE).
• Buying Shares: Investors purchase
shares through brokers or online
trading platforms.
• Holding Shares: Shareholders can
hold shares to earn dividends and
benefit from capital appreciation.
After Buying the shares
● Holding onto shares for potential
long-term gains.
● Selling shares to realize profits or
cut losses.
● Reinvesting dividends( part of profit)
for compound growth.
Group Activities

ADefine a Stock Market ?What happens there?

b)What are some of the worldʼs biggest stock Markets ?


c) What are the benefits and challenges associated with
investing in shares
d)What is the importance of diversifying oneʼs portfolio?
10 marks
Some of the Biggest Stock
Markets in the World.

Some of the worldʼs biggest stock


markets include:

a) The New York Stock Exchange (NYSE), the


Nasdaq, The London Stock Exchange (LSE), and
The Tokyo Stock Exchange (TSE).
Advantages of
Investing in Shares
• Potential for High Returns: Shares can
provide significant returns over time.
• Dividends: Regular income through
dividends.
• Ownership: Shareholders have voting rights
and can influence company decisions.
• Liquidity: Shares can be easily bought and
sold.
Disadvantages of
Investing in Shares
• Market Volatility: Share prices can
fluctuate widely.
• Economic Factors: Economic downturns
can negatively impact share prices.
• Company Performance: Poor company
performance can lead to losses.
• Lack of Diversification: Investing heavily
in one company can be risky.
Analyzing Risk
• Research: Importance of researching companies
before investing.
• Diversification: Spreading investments across
different sectors to reduce risk.
• Long-Term Perspective: Focusing on long-term
growth rather than short-term gains.

• Risk Profile- Understand your risk


tolerance, goals ,and your financial status
before you invest.
Summary
● Shares represent ownership in a company.
● The stock market is where shares are bought
and sold.
● After buying shares, investors can hold, sell, or
reinvest dividends.
● Benefits include high returns ,increase in share
price, sharing in the profits of the company

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