Stocks and shares tips for those who’re just getting started

Jane GibbonsStarred Page By Jane Gibbons, 22nd Feb 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/zxufrd2n/
Posted in Wikinut>Money>Investing

This is a 5 minute break down introduction to stocks and shares. I have encountered many people who express an interest in this concept, but are easily overwhelmed by the plethora of factors that can put you off before you even get started, I hope this guide will help open the door for a few people.

Introduction to stocks and shares

Investing in businesses using stocks and shares, or playing the stock market, however you want to refer to it, has never been and will never be a pursuit for the lazy amongst us. Depending on how much work you put into choosing how and when to invest, along with the level of risk you’re comfortable with, stocks and shares can either make or break your finances. In essence the stock market is comparable with gambling, so if gambling has never been your forte then I wouldn’t recommend becoming a part of this high-stakes game. This article from the BBC is a comprehensive guide on investing for beginners.

Never invest money you will need

Some of you may have read that and thought ‘obviously…’, but there’s been far too many cases of individuals who’ve got it horribly wrong by assuming they will come out on top. Never assume an investment will work out, because however promising a proposal may look on paper it doesn’t mean it will work out in reality.

You can get somebody else to do it for you

If you’re interested in the world of stocks and shares but don’t fancy yourself as a savvy investor, the online investment management industry is growing rapidly, this is a fairly young business model that caters to people who want to invest but lack either the time, know-how or confidence to manage their own portfolio.

The most disruptive of these investment companies is ‘Nutmeg’ - their heavyweight team of financial professionals has secured the company funding of over $32 million, making them one of the fastest growing fintech companies of 2015. Check out their free advice on the new stocks and shares ISA limits that all savers should be taking advantage of this year.

Buying stock is surprisingly simple

When people first become involved in the stock market they are shocked at how easy it is to get set up and started. You will need to register on a brokerage website, which can be synced with your bank account so money can be transferred. From these websites buying stock is often as simple as searching the company name and pressing a handful of keys.

Get to grips with the lingo

If you want to be successful it is crucial that you come to terms with the important terminology that dominates the process of buying stock. A few key examples are as follows:

Bid price – the best price you can sell shares of a stock
Ask price/offer – the best price you can buy shares of a stock
All or none – a request on a buy or sell order that implies the broker to either commit fully or not at all

Know the market cap

This refers to the total value of a business’s shares. To work out the market cap of a company you only need to do some simple multiplication. If a business has 200,000 shares selling at £100 each, the market cap (short for market capitalisation) for that firm is £20 million. It’s important to remember that this means a company with a stock price of £5 isn’t necessarily more valuable than one which is £20, as the amount of shares must be taken into account.

Tags

Investing, Investment Tips, Stocks And Shares

Meet the author

author avatar Jane Gibbons
Digital marketing executive, I like to write in the financial technology niche, I also run my own personal finance blog.

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Comments

author avatar Kingwell
23rd Feb 2015 (#)

Great tips. Thanks for sharing. Blessings.

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author avatar Sivaramakrishnan A
23rd Feb 2015 (#)

I do not know whether an ordinary person can get any decent return for his investment. My experience has been - two out of ten outperform the market, about five bite the dust and three just survive. As you rightly said stock market is like gambling! siva

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