Investing in the stock market has become a popular way to build wealth. However, understanding the difference between shares, bonds, mutual funds and exchange-traded funds (ETFs) is essential before entering the market. Each investment option carries a different level of risk, return potential and suitability based on investor goals.

Shares: High risk, high return option

Shares represent ownership in a company. When investors buy shares, they own a part of the company’s profits and losses. Stock prices move according to market performance, company earnings and investor sentiment.

Shares are best suited for investors who can handle volatility and aim for long-term capital growth. However, they carry the highest risk among all investment types.

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