Investing in shares and stocks are actually the same. Whether you're investing in shares or investing in stocks, your purchase involves a partial ownership in a company. Allowing the public to invest in shares of their company is a way that the business has of raising needed capital. Money is needed to begin the operation and to continue and grow the operation of the business. When the company publicly announces its desire to sell shares to the public, it is known as an IPO, or Initial Public Offering. Each share of the company's stock has a value, and anyone is at liberty to buy the number of shares they desire, or can afford. You will receive a share certificate indicating the number of share you own in the company, and you will be given voting rights. That is the extent of your company ownership.

Should I hold the shares?

The value of the company's shares will either increase or decrease in value depending on a number of market factors. Being a partial owner of the company's shares does not mean you are locked into the ownership. Should the price of the shares increase to a point that looks attractive to you, you may sell the shares and enjoy the profit you have made on your investment. Conversely, if the price of the shares begins to fall and it has something to do with, let's say, the management of the company, this could change and the price of the shares may go up again. If you feel that is the case, it would be wise to hold onto your shares for a while. But, if the price of the shares is falling because the company is losing market share, i.e., popularity in their particular industry, it would probably be wise to sell out now, taking a relatively small loss, rather than a considerable loss while waiting to see what happens.

Start Small

It is very smart to start purchasing shares on a small scale, especially if you are new to investing. Read some of the commentaries on the success of various companies to get a feel for the companies that are making a profit, and making good strides in their growth. Sometimes it is profitable to listen to the advice of a friend, or a family member about investing in shares of a particular stock. But don't take what others tell you as fact without investigating the company they recommend.

For novice investors, look for companies that you have read about that will undoubtedly grow and prosper. Buy shares of that company when the price is low, and sell when the price rises to a level that will offer you a substantial profit. That is the basic strategy of how to invest shares and to make money for your future goals. Whether you call it "investing in shares" or "investing in stocks", the principle is the same, you, as investor, are buying a small (or large) piece of the ownership of the company.

Caterina Christakos is a private investor and published author. To get more information go to: http://financialinvestmentsdirectory.com

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