Do you want to invest in your favourite company? If so, you’re here for a reason. Buying shares can be an easy and effective way of doing just that! This article will go over each step involved with buying stocks (shares) in the UK and list some well-known platforms where people have successfully purchased their desired share amount.
In this article, we will cover the following topics:
Finding a Reliable Share Dealing Platform
The easiest way to find a reliable share dealing platform is to research each potential candidate thoroughly. You can read reviews from other investors or get a feel for the platform by trying out a demo account when given the opportunity. Once you’ve found a few that you like, compare their fees and features to see which one is a good fit for you.
Most investors go for well-known platforms, such as Hargreaves Lansdown, for example. However, many newer players are definitely worth a try.
Here are some reliable share dealing platforms you might want to consider:
eToro offers a user-friendly platform ideal for first-time investors. It’s one of the best share dealing platforms because it allows users to buy shares in over 800 companies without paying commission fees.
Interactive investor features a few share dealing accounts, including Stocks and Shares ISA, SIPP, and a Trading Account. It’s a suitable platform for DIY investors who want more control over their investments.
Many new investors are looking for a broker that offers managed portfolios. AJ Bell Youinvest is an online share-dealing platform that offers worry-free investing, including a wide range of shares and funds available on both local and international markets.
The table below showcases a general comparison of the investment platforms mentioned above:
|Platform:||eToro||Interactive Investor||AJ Bell Youinvest|
|Available accounts:||Standard Investing Accounts||Stocks and Shares ISA, Junior ISA, SIPP, Trading Account||SIPP, Stocks and Shares ISA, LISA, Junior ISA, Dealing Account|
Creating a New Account
If you’ve already chosen a platform, it’s time to create your first trading account. Account registration is usually a simple process — you’ll need to provide some personal information and set up your login details to begin your trading journey.
For example, an online broker may ask for your name, address, date of birth, and nationality. Then, you will most likely have to provide a legal document to verify your identity. If the broker asks for identity proof, you must upload a copy of your passport, ID, or driving licence.
Additionally, some brokerages ask new clients about their investment goals and experience. Surprisingly enough, this is a good practice, as it helps brokers prepare tailored portfolios, advice, and recommendations.
It’s noteworthy that you’ll need enough funds in your account to cover the cost of your shares and commission fees. So, the final step would be to deposit money into your trading account before buying your first shares.
Decide Which Shares You Want to Purchase
Do you know which shares you want to buy? If not, don’t worry. Many first-time traders face this dilemma. According to our research, here are some things you should keep in mind when choosing shares:
- Think about why you’re buying shares. Are you looking for long-term growth or income?
- Do your research on the company. How has it been performing lately?
- Consider the risks involved. How volatile is the company’s stock price?
- Think about how much you’re willing to invest. You don’t want to put all your eggs in one basket, meaning you should invest your money in various companies.
How to Buy Company Shares?
Now that you’ve created an account and funded it, you’re ready to place an order. Buying stocks and shares is usually done through the platform’s trading interface, which will list all available shares.
Before placing an order, you’ll need to decide how many online shares you want to purchase. You can also set what’s known as a ‘limit order’. Setting up a limit allows you to specify the maximum price you’re willing to pay for your shares.
Once you’ve placed your order, it will be sent to the stock market for execution. Depending on the platform you’re using, you may be able to see real-time updates on the status of your order.
Monitoring Your Shares
Suppose your order has been executed, and you’ve become a proud owner of shares in a company. Now what? As unlikely as it may seem, your work isn’t done yet — you need to monitor your investment to ensure it’s performing as you hoped.
In other words, it’s advisable to keep an eye on the stock market and the company’s financial reports. You should also have a plan for what to do if the share price drops.
There are a few different ways to keep track of your shares. You can:
- Check the stock market regularly. Some of the most accurate tools for market analysis are Google Finance or Yahoo Finance.
- Set up price alerts. The alerts will notify you whenever the share price reaches a certain level.
- Read the company’s financial reports. By doing this, you’ll see how the company is performing and whether its share price is likely to increase.
Selling Your Shares
If you’re happy with the performance of your shares and want to take your profits, then it’s time to sell. You can do this by placing a ‘sell order’ through your platform’s trading interface.
When selling shares, you’ll need to pay attention to the stock market and set your sell order at the right time to maximise your profits.
Can You Lose Money by Investing in Shares?
It’s important to remember that shares are a volatile investment, meaning their price can go up or down. So, it’s possible to lose money if you don’t carefully monitor your investment and sell shares at the right time.
Here are some important notes to remember:
- Investment and risk management strategies are essential.
- A company’s price-to-earnings ratio is a somewhat precise indicator of its future performance.
- Dividing your investments into categories can minimise the chance of losses.
What Happens When You Buy a Share?
Now that you know how to buy shares in a company, let’s look at what happens when you become a shareholder.
Being a shareholder entitles you to certain rights, including the right to vote on important company decisions and receive dividends. That is, of course, if you’ve purchased enough stocks to put yourself in this position.
Additionally, as the share price goes up or down, your investment will increase or decrease. So, your investment will only pay off if you sell your shares when the price is higher than what you paid for them. On the other hand, if the share price falls below what you paid, you’ll make a loss.
What Are Dividends?
As a shareholder, you may also be entitled to receive dividends. A dividend is a sum of money paid out to shareholders from the company’s profits.
Dividends are usually paid out once a year, but some companies pay them more frequently. They can be paid in cash or shares, and you’ll need to pay tax on them.
Dealing with shares isn’t as risky as trading CFDs, for example. So, with a little bit of effort, you could be on your way to becoming a successful shareholder. The most important thing is to keep monitoring the share performance and sell them when you’re confident that the odds are in your favour.
Have you ever invested in shares? What was your experience? Let us know in the comments below.
Shares refer to the ownership of a business. They are financial products similar to crypto and CFDs, meaning you can buy, sell, or keep the purchased shares for future dealing opportunities.
The easiest way to buy shares is to find a share-dealing platform available in the UK. Luckily for you, trading from the UK is available on dozens of platforms, so it’s safe to say that you have an impressive selection to choose from.
Hargreaves Lansdown and eToro are some of the most trusted platforms. If you haven’t used them yet, it’s advisable to give them a try. eToro offers a demo account, while Hargreaves Lansdown allows you to hold shares in multiple investment accounts.