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How do you invest in the stock market uk?

December 14th, 2012 Leave a comment Go to comments

I need the basic of the basic stuff here. I don’t even have a clue where to go to invest in stock markets in uk or if you do it on line or over the phone. I just need to know how. I don’t need tips or what i should be investing in. Also what age can you invest in the stock market?

Step 1) When you are over 18yrs old, you can open a Share dealing account with either a dedicated stockbroking firm, or do it through your bank……… personally I prefer Halifax Sharedealing
http://www.halifax.co.uk/sharedealing/

Step 2) Read the articles at personal finance websites such as "The Motley Fool (UK)" to learn what you’re letting yourself in for….. this one’s a good primer: http://www.fool.co.uk/Investing/guides/When-Not-To_Invest.aspx

Step 3) Research the companies you’re thinking of investing in (again, see "The Motley Fool (UK)" as it’s more beginner friendly… just use the search box on their website)….. main tab I concentrate on is the "Forecasts" one, and the column "EPS Grth." column:
if it’s a minus figure in red it’s not a good sign
if it’s a green figure with a modest figure of 1% – 12% it’s usually promising
if it’s a green figure with an over-optimistic figure like +75% or +125% or +925% avoid it…. these always seem to end up making a big loss on your investment (like a near total wipe-out)
It’s also a good idea to read through the company data under the "Fundamentals" tab + any news about the company.

Step 4) You may want to set-up a "Stock watch list"….. think you can still create a portfolio at http://finance.yahoo.com to follow what some shares you’ve researched have been doing lately…. or you can also do it via a Smartphone app.

Step 5) Practise via Fantasy stockmarket games such as http://www.bullbearings.co.uk – there’s also one at the Halifax Sharedealing website you can use, but the Bullbearings one is what I’ve used the last several years.

Step 6) Once your Sharedealing account has been set-up, and you’ve researched enough to be confident in knowing what you’re doing, add some funds to your sharedealing account (remembering you’ll also be charged a commission fee for buying & selling)….. I’ve found it’s best to place a chunk of money on 1 company’s shares, rather than making lots of little minimum purchases… then hang onto them for as long as possible (the more often you buy & sell, the more commission fees you pay… and the more commission fees you pay, the more it eats into your profits, and defeats the point). Every so often you may get paid a "Dividend" (usually no more than 1p to £1 per share)… reinvest that money into buying more shares, keep on doing so for as long as you can.

Step 7) Read about a guy called "Warren Buffett"…… one of the Top3 richest people in the world, all from investing in Shares (mostly in the USA, but alot of the principles are the same)…. you’ll learn alot about the things you need to be successful at investing in shares (e.g. look before you leap by researching companies before buying their shares + being patient and hanging onto them for years for bigger profits to build up).
http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrenbio.htm
http://www.investopedia.com/terms/w/warrenbuffet.asp

  1. Kalyn
    December 14th, 2012 at 17:58 | #1

    Read about market, see brokers section
    References :
    http://www.londonstockexchange.com

  2. ConservativeChitChat
    December 14th, 2012 at 18:06 | #2

    Step 1) When you are over 18yrs old, you can open a Share dealing account with either a dedicated stockbroking firm, or do it through your bank……… personally I prefer Halifax Sharedealing
    http://www.halifax.co.uk/sharedealing/

    Step 2) Read the articles at personal finance websites such as "The Motley Fool (UK)" to learn what you’re letting yourself in for….. this one’s a good primer: http://www.fool.co.uk/Investing/guides/When-Not-To_Invest.aspx

    Step 3) Research the companies you’re thinking of investing in (again, see "The Motley Fool (UK)" as it’s more beginner friendly… just use the search box on their website)….. main tab I concentrate on is the "Forecasts" one, and the column "EPS Grth." column:
    if it’s a minus figure in red it’s not a good sign
    if it’s a green figure with a modest figure of 1% – 12% it’s usually promising
    if it’s a green figure with an over-optimistic figure like +75% or +125% or +925% avoid it…. these always seem to end up making a big loss on your investment (like a near total wipe-out)
    It’s also a good idea to read through the company data under the "Fundamentals" tab + any news about the company.

    Step 4) You may want to set-up a "Stock watch list"….. think you can still create a portfolio at http://finance.yahoo.com to follow what some shares you’ve researched have been doing lately…. or you can also do it via a Smartphone app.

    Step 5) Practise via Fantasy stockmarket games such as http://www.bullbearings.co.uk – there’s also one at the Halifax Sharedealing website you can use, but the Bullbearings one is what I’ve used the last several years.

    Step 6) Once your Sharedealing account has been set-up, and you’ve researched enough to be confident in knowing what you’re doing, add some funds to your sharedealing account (remembering you’ll also be charged a commission fee for buying & selling)….. I’ve found it’s best to place a chunk of money on 1 company’s shares, rather than making lots of little minimum purchases… then hang onto them for as long as possible (the more often you buy & sell, the more commission fees you pay… and the more commission fees you pay, the more it eats into your profits, and defeats the point). Every so often you may get paid a "Dividend" (usually no more than 1p to £1 per share)… reinvest that money into buying more shares, keep on doing so for as long as you can.

    Step 7) Read about a guy called "Warren Buffett"…… one of the Top3 richest people in the world, all from investing in Shares (mostly in the USA, but alot of the principles are the same)…. you’ll learn alot about the things you need to be successful at investing in shares (e.g. look before you leap by researching companies before buying their shares + being patient and hanging onto them for years for bigger profits to build up).
    http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrenbio.htm
    http://www.investopedia.com/terms/w/warrenbuffet.asp
    References :
    Been researching since about 2004, and engaged in actually investing in Shares since about March 2005… got tons of different shares made through small investments via a "Halifax Sharebuilder" account, some making near total losses…… others making 100% or even 200%+ profits (e.g. bought for a tenner, now worth £20 – £30)
    http://wiki.alltheinterwebanswers.com/index.php?title=Shares

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