Earning from investments

Should you invest in stocks and shares – is it too risky?

Are stocks and shares worth investing in?

Please be aware that in this article I only talk about the UK stock market and not any other country. 

Simple explanation about stocks and shares

Just to give a brief and simple explanation on what they are all about. There was a time that they were only something that could be bought by people with a lot of money. That has not been the case in recent years, where anybody can buy them.

A stock is what the company is worth on the market, this is then split up into individual shares. Shares can be bought off other people or on share dealing platforms. Each share you buy, is another little fraction of that company that you own. You are able to recieve dividends if offered and vote on decisions that need to be made like possible takeovers. It is a lot better for companies to offer shares to raise money than to go to banks because of high interest rates when repaying that money back.

There are different markets that companies get split into in the UK, depending on how much they are worth. Big succesfull companies can be found on the FTSE 100, which are the top 100. Then you go down to the FTSE 200.

Should I invest?

So you are thinking of being the Wolf of wall street, well maybe thinking of investing a little money into stocks and shares. Why not? loads of people are investing around the world, but it can be risky. There can be many ups as well as downs, its all about proper research reading books and on the internet. Thinking carefully at what companies you are going to invest in. It usually is a good idea to go for companies that are usually generous with how much in dividends they give to shareholders, which makes it more worth it because you are getting a decent income over the year.

Remember to split up your investment into more than one company, as you could loose all of your money if that one company goes bust. Do look into stocks and shares ISAs in the UK as they do all of the work for you, but sometimes for a more sizeable fee, but there are experts that invest for you in the best performing companies.

Pros and cons of investing in the stock market

Pros:

  • Gain some good profit
  • Could have some recurring income from dividends
  • May get more than if your money was in a savings account

Cons:

  • Make consiberable losses
  • Very up and down at times
  • Big gains and income can be taxable in the UK

Share dealing platforms

There are some great websites to use to start off in buying and selling stocks and shares. One of them that I use is AJBellYouInvest based in the UK and they don’t charge a lot to buy and sell. It is an easy website to use and gives great informational videos on what is going on in the markets.

Here is the link to all the charges which are very reasonable

 

Thank you for reading my article, please feel free to leave any comments below and I will reply back as soon as possible.

Source: https://www.moneyobserver.com/guides/stocks-and-shares

 

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