Purchasing shares gives you part ownership in a company and the right to receive a portion of the profits, commonly referred to as dividends. An added bonus is that dividends can provide you with substantial tax benefits, because they are usually franked – either fully or partially. This means the company has already paid tax on this money – usually to the corporate tax rate of 36%. In some cases, it may be even higher.

Changes in share prices reflect the market value of the company. Fluctuations in the market value of shares will be reflected in the underlying value of your original investment.

Income is paid to you in the form of dividends, representing your share of the company's profits.

An added bonus is that dividends can provide you with substantial tax benefits, because they are usually franked - either fully or partially. This means the company has already paid tax on this money - usually to the corporate tax rate of 36 per cent. In some cases, it may be even higher.

The share market is characterised by volatility, with the value of share prices often fluctuating on a daily basis. However, over time, the impact of the daily movements diminishes.  Although past performance is no indication of future performance, the Australian share market has outperformed most other types of investments in the last 10 years. In the last 5 years alone, the ASX 200 grew by over 150% backed by strong resource and financial services sectors.

The share market can be a high-risk prospect if you speculate. Speculators 'gamble' by attempting to profit from short-term fluctuations in share prices. The risk is substantial because it is extremely difficult to predict the market's movements over the short term.

However, shares can be relatively low risk if you take a longer-term view and invest in well-researched companies that are fundamentally sound. If you are not comfortable entering in to the share market directly, but want to invest in this asset class, a managed investment (where your funds are pooled with those with other investors and invested by specialists) may be a good investment option to start with.

Below are 8 reasons why you should invest in shares

• Capital growth: Over the long term, investing in shares can product significant capital gains through increases in share prices.

• Dividends: Companies pay most of their post-tax profits to their shareholders in the form of dividends

• Ease of buying and selling: Compared to other investments, shares are very portable and can be bought and sold quickly

• Diversifies your investment portfolio: Diversify your investment portfolio by having part of your money in the share market. There are over 1,700 companies listed on the ASX covering a wide range of industries such as materials, financial services, retail, health care and telecommunications. Investing across different sectors can help you reduce your risk. You can buy shares directly or through managed investments or with your superannuation

• Shareholder discounts and entitlements: Some companies, for example, retail, hospitality or entertainment, offer generous discounts to shareholders when they buy goods and services from the companies or their subsidiaries. There are also a number of tax advantages when you invest in shares.

• Control the size of your investment: As the investor, you get the control the size of your stock purchases. You can start your share portfolio from as little as $500.

• Liquidity: Shares can be bought and sold quickly and investments can be turned into cash in about 3 days following the trade day

• Cost effective: There are many online brokers which make trading in the stock market very cost effective.

As with any other investments, we recommend you seek professional financial advice first to ensure this is the best option for you. If you are thinking of investing in shares, speak to one of the financial planners at Intellichoice on 1300 55 10 45. We have access to a range of investment options and will be able to recommend an investment strategy that suits your needs and meets your medium and long-term goals.