In recent years, buying shares has become an increasingly appealing investment opportunity. In today’s technologically advanced society, there are now all manner of platforms through which you can buy shares, whether it’s over the phone, via post, online or even through a mobile app! However, with all these options on offer, the practice of buying shares can often seem daunting. Here are our top tips on where to start:
Carry out extensive market research
Due to the fluctuating nature of the stock market and share prices, it is important to carry out extensive research before you commit to purchasing and selling shares. By investigating online and learning about a company’s recent stock market performance, its reputation within its field of industry and the economy as a whole, you can assess the short term and long term risks of investing in particular organisations.
It is also important to consider your long term stock market prospects. Do you want to rapidly buy and sell shares to make a quick profit or are you interested in becoming a minority or majority shareholder within a particular company or organisation? Although the stock market offers rife opportunities for rapid sales and quick profits, becoming a shareholder within an expanding organisation or an established corporation can equip you with the opportunity to benefit from exclusive shareholder discounts, or even to influence how the company is run.
If you intend to become a minority or majority shareholder within a company, it is important that you research the practice of shareholder’s agreements and the Disclosure Letter, UK laws differentiate from other areas of the EU so be careful that you are reviewing the correct information for your locale. Understanding these important legal documents can prove crucial in protecting your rights, responsibilities and long term investment opportunities as a minority or majority shareholder.
Choose a suitable stockbroker
You have to buy shares through a broker who is registered with the stock exchange. As matters stand there are several stockbroker options at your disposal, including established City traders, the stockbroking divisions of large banking corporations or building societies and financial advisory firms who offer stockbroking services, as well as various online stockbroker companies. It is important that you extensively research the legitimacy, brand reputation and share purchasing processes of these organisations in order to find a stockbroker who is best suited to your particular investment interests.
Create a brokerage account
Now you have a stockbroker you can set up a brokerage account! This is the main account through which you will buy and sell real shares either online, over the phone or via the postal service. When choosing a broker account, you should scrutinise the terms and conditions of each account in order to assess whether it is suited to your investment interests. For instance: will you be charged inactivity fees if you don’t trade regularly? If you intend to rely on your shares for a regular income, how much will the withdrawal fees be? What are their interest rates? You should consider all of these factors before committing to opening a broker account and commencing trading.
