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Why should I have an interest in shares?Today, more than ten million people own shares, while many more belong to a pension scheme, have an insurance policy, an Isa, unit trust or another form of collective savings invested in shares traded on the London markets.
What are the pros and cons?Compared to saving with a bank or building society, investing in stocks and shares carries an element of risk because prices can go down as well as up. There is, however, the possibility of greater rewards. Funds invested in equities in the long term (ten or more years) have outperformed regular savings accounts. Before investing in stocks and shares you must be clear abou...
What are shares?Shares, as the name says, are shares in a limited company. Each shareholder is a part-owner of the company in which they have bought shares. Shares in UK companies are traded on the London Stock Exchange. Investors can buy and sell their shares whenever they wish. Shares, also called equities, are issued by companies on incorporation and later perhaps when they are buildin...
Why should I buy shares?More than 10m people own shares directly. But many millions more have an indirect stake in the stock market through pension schemes, life insurance policies, personal equity plans and unit trusts. All of these invest in shares traded on the stock market. Investing in shares is different from saving in a bank or building society deposit account. There is more risk - but the...
or do I want the relatively safe government securities, known as gilts?Stockbrokers today have a range of services tailored for the needs of the growing numbers of small shareholders. Some operate from City offices, some from High Street branches, some only by telephone. Most large banks and building societies offer share dealing services as well. Before choosing a stockbroker, contact several of them and ask how much they will charge. They e...
What does a stockbroker do?Once you instruct a broker to buy shares, he/she telephones a market maker - the person who actually gets hold of the shares for you. A few days later, you will receive a contract note. This shows the details of the transaction. Your broker will indicate when he/she needs to have your money to pay for the shares. If you hold the share certificate, you must send this to you...
How do you hold the shares?Once you have bought your shares, there are two ways to hold them: as a certificate or electronically. Your stockbroker can advise which option suits you better. Traditionally shares have been held in paper form known as certificates. A share certificate is a piece of paper which is evidence that you are the owner of the shares. Your name will appear on the company's share...
How much does it cost to buy shares?Stockbroking costs vary according to the level of service you use. You should select the service that meets your needs and level of experience, which may not necessarily be the cheapest. Execution-only will generally be the cheapest service. You will pay more for advice or for handing over the management of your investments to a stockbroker. Before you start dealing in sha... |
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A guide to the stock market