Educational material from 
What you will learn
- Explain what owning a share means.
- Calculate the value of a holding.
- Describe what a price drop changes in a simple example.
An example: a small part of a bakery
Imagine a fictional bakery with 1,000 shares. In this exercise, you own ten of them. Your ownership interest is 10 ÷ 1,000 × 100 = 1 percent of the company. We assume that the total number of shares stays the same throughout the example.
Suppose each share costs SEK 100. Your ten shares are worth 10 × 100 = SEK 1,000. If the price falls to SEK 80 per share, the holding is worth 10 × 80 = SEK 800. Its value has fallen by SEK 200, or 20 percent of the starting value.
You still own ten shares and 1 percent of the company in this model. The number of shares did not change; their price did. The company, prices and event are invented. This calculation leaves out fees, taxes and dividends.
If the table does not fit, scroll it sideways.
| Measure | At the start | After the price drop |
|---|---|---|
| Shares you own | 10 | 10 |
| Ownership interest | 1 % | 1 % |
| Price per share | SEK 100 | SEK 80 |
| Holding value | SEK 1,000 | SEK 800 |
Why can a share price rise or fall?
Share prices can be affected by a company's performance, expectations and how many people want to buy or sell. A familiar or popular company is not automatically a safe investment. Some companies pay dividends to shareholders, but a dividend is not guaranteed.
The fictional bakery calculation explains ownership and value. It does not explain what an actual company's shares will cost in the future. To discuss that question, you would need information about the business and would still face uncertainty.
What risk remains?
A share can lose value. Dividing exposure across companies, industries and markets reduces dependence on one company. Diversification does not remove the possibility of a loss. The Swedish financial regulator, Finansinspektionen, discusses both diversification and checking facts rather than following stock tips without scrutiny.
Keep a calculation separate from a decision about a real investment. Knowing how ten shares are valued does not tell you which shares to buy. Use the example to check whether you can distinguish the ownership fraction from the amount a holding is worth.
Practise with a fictional amount
Investiq's classroom activity uses a fictional budget of SEK 10,000. You choose two companies, explain an allocation and calculate an invented price drop. The suggested activity takes 45 minutes and works on paper without an app account or a deposit.
The product guide explains Investiq's described learning and simulated-trading experience. Read it to understand what is shown and where to find current launch information. This lesson is educational material; its examples do not recommend securities to buy.
Try it yourself
You own five shares worth SEK 120 each. The price falls to SEK 96 per share. Calculate the holding's starting value, ending value and percentage change.
Show the solution and explanation
SEK 600 becomes SEK 480: a fall of SEK 120, or 20 percent.
5 × 120 = 600 and 5 × 96 = 480. The change is (480 − 600) ÷ 600 × 100 = −20 %. You still own five shares in this example.
Check your understanding
What does owning a share mean?
You are a part-owner of a company. A share is an ownership interest, not a guarantee that its purchase price will be repaid.
Five shares are worth SEK 120 each. What is the holding worth?
5 × 120 = SEK 600.
If those shares fall to SEK 96 each, do you lose a share?
No. In this example you still own five shares. Their total value falls to SEK 480, a 20 percent decline.
Practise with virtual money
Try what you just learned in a practice portfolio with virtual money. You don't deposit any real money.
How the practice portfolio worksKeep learning and practising
More lessons on this topic
Start here: shares and portfolios
Sources and examples
- SEB: share ownership (in Swedish)
- Unga Aktiesparare: shares and dividends (in Swedish)
- Finansinspektionen: shares, risk and checking facts (in Swedish)
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
