Our Complete Guide to Buying Stocks And Shares

Shares are one of the four main investment types, along with cash, bonds and property. They carry risk, but they can offer the highest returns.

Shares (also known as equities) are like tiny fractions of a company. If you own one, you own a little bit of the company and a proportion of the company’s value.

Investing in shares means buying and keeping them for a while in order to make money.

There are two ways of getting money from shares of a company:

If the company grows and becomes more valuable, the share is worth more – so your investment is worth more too.

Some shares pay you part of the company’s profits each year, called a dividend.

Holding shares in just one company is extremely high risk. If that company gets into difficulties, then you could lose some or all of your money. You can spread your risk by diversifying – buying shares in a variety of companies and investing in other assets or countries – or by putting your money into pooled investments like unit trusts or OEICs.

If you want to buy and sell shares that you own yourself, you can use:

An online broker, a traditional stockbroker or a financial adviser or investment manager – you can ask them to buy or sell shares for you, but they will still go through a stockbroker.

You can also invest in funds through many banks, a fund manager, a financial adviser or a traditional or online broker.