Although past performance is not a guarantee of future performance, share investment outperforms all other forms of investment in the long term.

A licensed stockbroker buys and sells securities (including shares and bonds) for clients and are paid a commission for doing this. If you want to buy and sell shares or bonds of companies listed on the Exchange you must give an order to a licensed broker.

 

A broker must hold a valid license from the Capital Markets Development Authority (CMDA). It can either be a company or an individual. Where the broker is a company, the individuals who provide brokerage services to clients for the company are call broker representatives and they too must hold a valid license from the CMDA.

Investors can benefit from an increase in the value of the shares and receive dividends if the company performs well. Over the longer term, shares can produce significant capital gains through increases in share prices. Some companies also issue free or bonus shares to their shareholders as another way of passing on company profits or increases in their net worth.

Compared to other investments like property, buying and selling of shares is simple and relatively cheap. Shares afford liquidity. They can be easily bought and sold. It takes only T+3 days to perfect a transaction on the floor of the South Pacific Stock Exchange, where 'T' represents the day of transaction.

In order to diversify your investment portfolio, you will probably have part of your money in the share market. You may buy shares directly or through own savings or your superannuation.