Through
a stockbroker or share dealing service, you can either buy
or sell shares. At present, there are a number of services
available for you to buy or sell shares i.e., via Internet,
through telephone or postal dealing services.
The
commission charged by the stockbroker or share dealing
service may depend upon the kind of service that you’re
looking for. The cheapest way to deal in shares is usually
on an 'execution only' basis, which means that a broker
will act on your instructions to buy or sell but will not
give you advice on the merits of the transaction.
But if you’re new to share dealing, there are a few factors to consider
before investing your money. Firstly, you need to calculate how much money
you’ve available to buy the shares. Remember that share value can decrease
as well as increase, so make sure you aren't investing money that you cannot
live without.
Also
think about how long you want to invest your money for.
Are you looking to create an income from your shares through
dividends, which are paid twice a year, or do you want
to create a lump sum through the increase in share value
(capital growth)? Asking yourself these questions will
help you determine the type of portfolio that you want
to put together.
Although
share dealing is always going to pose a certain amount
of risk, there are ways to minimise the possibility of
losing money. One way is to invest in 'blue chip' companies.
A blue chip is a well-established, highly successful company
with a good track record on the Stock Exchange and they
offer investors a more secure option, although even this
can never be guaranteed.
Another
way to minimise risk when share-dealing is to spread your
investment over a number of different companies and
industries as this will help you avoid losing your entire
investment wealth should one particular company or industry
suddenly come crashing down.
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