Research shows that good shares on the stock exchange deliver a higher return than almost any other investment – but the return does come with some risk. There are over 600 companies listed on the Johannesburg Stock Exchange. When you buy shares in one of these companies you will then own a small piece of it. If the company’s performance is good and the shares become more valuable, you should make money. If the company’s performance is poor and the shares drop in value, you could lose money.

Most people own shares without even knowing it. When you put money into a retirement annuity, endowment policy or unit trust, the insurance or investment house is investing your money on the stock exchange. But, a part of what they make on your money does not come back to you because of sales commissions, their admin costs and profit.

When you invest directly in the stock exchange, and the shares increase in value, you get all the profit. Your only cost is a small brokerage commission of around 1% to get in and the same to get out.

Even with all the recent ups and downs, over time, the stock exchange has proven to be just about the best investment available to private individuals. If you look at the long-term growth of all the shares on the Stock Exchange from 1910 to 1995 you’d find an average annual return of 18%.

That average beats every other investment that most private investors have access to. If you were clever and chose above average shares during that period you could have made a much better return.

The Stock Market is not a get-rich-quick scheme. You must take the time to learn about it then allocate about one hour each week (or each day if your really excited about it) to keep in touch with your investments and other opportunities.

• Spend a few hours each week reading the financial press. Learn about the economy and which companies that are likely to benefit from the economic trends.
• Learn how to look at the fundamental information that’s available on each listed company. Get to understand just two or three of the key things that will make a company’s share price grow (like earnings per share growth) then focus on those things when deciding which shares to buy.