Did you know when you buy shares, you actually become a small owner of the business? While the same processes exist on how to own stock since the establishment of stock exchanges, the advancement in technology has allowed this to become digitized and as easy as accessing this through your mobile phone.
What is a stock exchange?
In simple terms, a stock exchange acts as a market where you can buy and sell ownership in companies, and it helps ensure that trading is fair and transparent. Just like you can go to a regular market to buy groceries, a stock exchange is a place where you can buy and sell “pieces” of a company.
Stocks can be bought and sold on several exchanges. Some well-known stock exchanges, like the New York Stock Exchange and NASDAQ, have physical trading floors where traders used to shout and make deals. But nowadays, most trading is done electronically through computers.
What is Bursa Malaysia?
Like some well-known stock exchanges such as the New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE) and Tokyo Stock Exchange (TSE), in Malaysia we have Bursa Malaysia. Bursa Malaysia plays a crucial role in the Malaysian economy by facilitating the flow of capital and providing a marketplace for companies to raise funds and trade equities. Stocks here can also mean equities.
How do companies raise funds?
Stocks first become available on an exchange after a company puts its shares on the exchange; this is called an initial public offering (IPO). For example, Mr DIY Group Bhd conducted its IPO in Oct 2020, putting 941.49 million shares on Bursa Malaysia.
You, as an investor, buy those shares. And then another person offers to buy those shares at a higher amount. This difference is your profit (but if you sell it a lower price, that is your loss).
When you buy these shares, you then become a small owner of Mr DIY😊
How does Raiz help you to become a small owner?
When you invest in Raiz, you are actually investing in mutual funds. A mutual fund is like a big pool of money collected from many different investors. When you invest in a mutual fund, you are buying shares of the fund, which represent your ownership in the pool of money and the investments it holds. Mutual funds offer a way for people to invest in a diversified portfolio even with small amounts of money and become small owners of multiple companies!
To learn more about what is in your Raiz portfolio or how to customize it, you can check it out in the Raiz app here or read more here.
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Important Information
The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.
The information on this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.
Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.