This page is an overview of sharemarket basics, we want you to be educated in the basics of the stockmarket before you dip your toes in.

We do have a more in-depth frequently asked questions page available.


  • How does the stockmarket work?  

    The stockmarket allows you to buy and sell parts of the company that is on the stockmarket. The general aim of buying into that company is, you think it will increase in value and so will your stock value within the stockmarket.

    Share investing is accessible to almost anyone: individuals, superannuation funds, companies, institutions, and large offshore investors.

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  • How do I invest?

    Buying and selling shares isn’t exactly like going to the shops and buying bread and milk.

    Firstly, you’ll need to open an account with a stockbroker, such as Trade For Good. The stockbroker will act as your agent to the Australian Stockmarket Exchange and are responsible for making your transaction to buy or sell a stock happen and arranging electronic settlement or payment.

    You can start investing with as little as $500. This is the minimum amount you can initially purchase in any listed company. Share prices vary greatly, from over $200 a share to just a few cents. Accordingly, the number of shares in any company you buy depends on how much you have to invest and its share price. You’ll also need to pay brokerage or the transaction fee (i.e. a fee to the broker) on each share transaction.

    Studying various brokers and how they stack up not only on price but also other features, products, and services of interest to you. For online trades, Trade For Good charges brokerage at $19.80 for transactions up to $ 17,147 in value; then $19.80 + 0.110%. Check the Comparison table below to see how we compare.

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Brokerage cost


Donation to charity


Donation cost


Amount saved


This table is based upon 2021-2022 ATO individual Income Tax rates. The above rates do not include the Medicare Levy of 2%. The exact level of your tax deductibility will vary depending on your present financial circumstances. Please seek assistance from an independent taxation professional for formal guidelines. The donation amount is the brokerage, minus the ASX and Settlement fees, then 50% of the remainder will be donated on your behalf, for more information refer to the Financial Services Guide.

  • How do shares trade?

    The ASX runs an electronic trading platform where brokers lodge orders to buy or sell shares. Each listed company has its own unique stock code, which is usually three letters in length. e.g. Telstra stock code is ‘TLS.

    A trade occurs when a buyer’s price (known as a “bid”) and a seller’s price (known as an “offer”) overlap. If the bid price on Telstra is $2 and the seller’s offer price is $2.20, then nothing happens. If they match, that stock is sold.

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  • First in, best dressed

    When placing a trade there can be several bids or offers at the same price. When the bid price matches with the offer price, then an order is made and the quantity of the trade size is done.

    Now when prices overlap and orders are traded, the earliest order has priority over the next earliest(higher priority on the list of buyers or sellers on that particular price) and is filled in full before the next order is allocated any shares.

    The number of buyers and sellers for a security at any time is called market depth.

    Watch the video below for more information on market depth and how it works.


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  • What happens when my trade is successful?

    Following the transaction, you’ll be sent a contract note from Morrison Securities(they are the broker for Trade For Good) confirming the details of the transaction and settlement details.

    In Australia, shares settle on a “transaction date plus 2 working days’ basis” (“T+2”), meaning that settlement occurs 2 working days after the transaction date. So, if you trade on a Tuesday, settlement occurs on Thursday.

    This when the settlement date, buyers pay the proceeds (via their brokers, and their bank accounts are debited), while sellers receive the proceeds. The good part is, if you are selling, the funds generated from the sale, will be available within the software for immediate use of other buys.

    The register of shareholders is updated to record the details of the new owner, you will receive a letter from the listed companies stock transfer company within a few weeks.

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  • When is the Australian Stock Exchange open?

    The ASX is open every working day except for national public holidays.

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  • What hours are the stock exchange open?

    The market opens each working day at 10am (EDST) and closes each day around 4.10pm (EDST). You can still place, amend or cancel orders outside of these hours, they just won’t update until the next trading day.

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  • What do I receive as a shareholder?

    After you complete your first trade, you’ll receive a contract note from your broker, a CHESS holding statement from the ASX, and a welcome pack from the company. The latter will invite you to provide(if your broker hasn’t already passed them on):

    • details of a bank account for any dividend payments;
    • your tax file number or exemption (which is not compulsory); and
    • communication preferences for receiving notices, annual reports, and other information from the company.
    • If the company operates a dividend reinvestment plan, you’ll also receive information on the plan and how you can elect to participate.

    As a shareholder, you’ll be entitled to attend the company’s annual general meeting (and any general meetings) and vote on resolutions, including the election of directors and the remuneration arrangements for key officers. You can also receive a copy of the company’s annual report and other important information.

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  • Why invest in shares?

    Most investment experts agree that while there’s no right or wrong way to invest, it’s best to have a mix of the different asset categories, such as shares or property, and they being diversified within that category. The reason for this is that one asset category rarely consistently performs better than all others and that when blended together there is a better chance of a higher return overall, with reduced risk.

    Shares are considered to be a “growth” asset, meaning that a large part of the total return should be generated from an increase in their value. While the other part of the return is income through the payment of dividends.

    Note that it hasn’t always been plain sailing for the Aussie share market, with crashes including the 1987 Black Monday crash; the dotcom bust of 2000; the global financial crisis in 2008-09, and the Covid pandemic in 2020. Importantly, the market has recovered on each occasion.

    Shares can be more volatile in the short term than other asset classes such as bonds, cash, and sometimes property. Typically, shares will perform better than cash over the medium term and should deliver a positive “real” return, that is, higher than inflation. Even in a bad year, some companies will deliver outstanding performance for their shareholders. And in really good years, not all companies will deliver positive returns.

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  • The advantages of shares

    Along with the potential for high returns over the medium term, shares offer several advantages compared to other asset classes:

    • You can invest as little as $500 in one company to get started. You don’t have to be a millionaire to be a share market investor, and while transaction costs will need to be considered, it doesn’t take too much to build a diversified portfolio of stocks;
    • Most shares are liquid, which means that they’re easy to sell and you’ll receive your funds within two business days.
    • Transaction costs are also relatively low. For Trade For Good charges brokerage at $19.80 for transactions up to $ 17,147 in value; then $19.80 + 0.110%. Check the Comparison table below to see how we compare.
    • You can see exactly what your shares are worth with live pricing, so you will be able to see how your portfolio is tracking; and
    • For Australian shares (dividends), you may be entitled to franking credits depending on the dividends. This may offset tax payable on your tax return.
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  • What about the disadvantages?

    What are the disadvantages:

    • The main disadvantage is that as higher-risk assets, you can lose your capital. There can be quite a lot of risk relating to an individual company and that’s why investors usually maintain a portfolio of different shares to diversify this risk;
    • Volatility risk, that is the market taking a sudden dive and dropping quickly. This is much harder to manage. We do offer free tools with the IRESS Viewpoint software, where you can set stop losses, where if a stock drop 20% it will place an order into the market to sell the stock and minimize the downturn.

    The return on your purchase, being the dividends, you would expect companies to increase their dividends over time, there is the risk that companies will cut or eliminate their payments due to various factors.

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  • Dividends

    When companies make a profit, they will typically return part of their profit to their shareholders through the payment of a dividend. The dividend is usually paid twice yearly.

    Not all companies make a profit so they don’t pay a dividend. Others choose not to pay a dividend because they want to re-invest the profit in growing the company. The majority do pay a dividend – but will usually retain some of the profits to re-invest in the company.

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  • Capital gains & other tax issues

    If you buy shares in a company and sell those shares for a profit, you’ll potentially have to pay capital gains tax. You’ll be taxed at your marginal tax rate on the difference between what you sold the shares for and what you paid for them.

    However, Individual investors who have owned the shares for more than 12 months are eligible for a discount of 50%, meaning that they only pay tax on half the gain. Superannuation funds get a one-third discount, while company shareholders aren’t eligible at all. Capital losses can be used to offset capital gains, and if not applied, can be carried forward to the following tax year.

    Like interest on a bank account or from a term deposit, dividends are taxable. If the dividend is “franked”, this means that the company has paid tax to the Australian Taxation Office (ATO) and the attached franking credits (also called imputation credits) can be applied by the shareholder as a tax offset. If the dividend is “unfranked”, there aren’t any franking credits.

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  • Good reasons to invest in shares

    Whether it is the prospect of high returns, the potential benefits of franked dividends, or liquidity, there are good reasons to invest in shares. And with low transaction sizes and costs, it is relatively easy to build a diversified portfolio of shares.

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When it comes to starting out investing, it’s critical that you know the basics before jumping in, including getting across the difference between stocks and exchange-traded funds (ETFs).

The concepts may seem tricky at first, but both stocks and ETFs are at their essence investment vehicles that can give you a way to begin investing. Here are a few more things you should know about these common products as you look to build your portfolio.


What exactly are ETFs?

Stocks and ETFs have some similarities. They both are traded on the  Australian stock markets, their prices move up and down and they are linked to the performance of companies.

ETFs, are comprised of baskets of different types of investments that are pooled together into a single entity, with each share of an ETF giving its owner a proportional stake in the total assets of the ETF.

An ETF is a type of investment fund that can be bought and sold on a securities exchange market, like a stock, many of them are described as “’passive” investments. Passive ETFs commonly track a market index and do not try to outperform the market. Hence, they will tend to go up or down in value in line with the index they are tracking.


How are ETFs different from stocks?

Stocks track a single company, that’s because a stock is a type of investment that represents an ownership share in one company. When you buy a company’s stock, you’re purchasing a small piece of that company, not a share in a proportional stake in the total assets of a fund.

These differences bear on the volatility of both investment types. For instance, when it comes to individual stocks, they can be impacted by things like a bad report, negative profit guidance, or even the appointment of a new chief executive. By contrast, ETFs tend to be less volatile than individual stocks because they are a mixture of stocks in the fund, and less susceptible to overall change as it averages out across the fund.

Are ETFs or stocks better for me?

What product you choose depends on your particular financial circumstances and risk tolerance. A big upside of ETFs is that you don’t need to invest as much money to get started and each share in an ETF gives you exposure to a diversified portfolio of investments.

Another plus is that there are ETFs that cover nearly the whole range of available investment assets in the financial markets. While stock ETFs are most common, there are also funds that target many other asset classes like bonds or commodities.


ETFs are popular with millennials

The popularity of ETFs among those aged 18-35 is likely due to a mix of factors. For instance,  younger investors may opt for growth ETF portfolios to aim for higher potential returns of around 10 per cent per annum if they do not need to access the money for several years.

They have also removed much of the leg work from investing. For instance, you can invest in an ethical fund and not have to research all the shares involved, the expert team selects a range of companies that passes a screen to companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.

Or you can invest in a top 20 yield maximizer fund, which aims to generate income and reduce the volatility of returns by implementing an equity income investment strategy over a portfolio of the 20 largest ASX-listed blue-chip companies.

ETF’s give you a more diverse way to invest in the Australian stockmarket, and the ability to find investment opportunities you want without doing the research, as they offer you a fund-focused product like the environment. The downside and upside, depending on your investment style is, they are more passive investments, they won’t experience the benefits of an indivuals stocks grwoth, but an overall fund growth.


Active vs Passive Investing?

Active Investing

Active investing, as its name implies, takes a hands-on approach and requires that someone act in the role of a portfolio manager(someone that will research, pick the stocks, monitor and interchanges the stocks depending on performance). The goal of active investing is to beat the stock market’s average returns and take full advantage of short-term price fluctuations. It involves much more research and the expertise to know when to pivot into or out of a particular stock or any asset. A portfolio manager usually oversees a team of analysts who look at qualitative and quantitative factors, to try to determine where and when that price will change.

Active investing requires confidence that whoever is investing in the portfolio will know exactly the right time to buy or sell. 

Passive Investing

If you’re a passive investor, you invest for the long haul. Passive investors limit the amount of buying and selling within their portfolios, making this a very cost-effective way to invest. The strategy requires a buy-and-hold mentality. That means resisting the temptation to react or anticipate the stock market’s every next move.

The prime example of a passive approach is to buy an index fund that follows one of the major indices like the ASX top 200 stocks. Whenever these indices switch up their constituents, the index funds that follow them automatically switch up their holdings by selling the stock that’s leaving and buying the stock that’s becoming part of the index. This is why it’s such a big deal when a company becomes big enough to be included in one of the major indices: It guarantees that the stock will become a core holding in thousands of major funds.

When you own tiny pieces of thousands of stocks, you earn your returns simply by participating in the upward trajectory of corporate profits over time via the overall stock market. Successful passive investors keep their eye on the prize and ignore short-term setbacks.