HOW INVESTING IN SHARES

How do you think is it important what will be There are four main investment types; along with cash bond and property. However the carry high risk but the can offered the highest returns. The share are also called equities which are tiny fractions of a company and if you own one you own a proportion of the company’s value. Investing in shares means buying and keeping them for a while in order to make money. There are two ways of getting money from shares of a company. If the company grows and becomes more valuable, the share is worth more, so your investment is worth more too. Some shares pay you part of the company’s profits each year, called a dividend. If you buy shares in larger, long-established companies you’ll probably get dividends, but you may not get rapid growth. Shares that pay regular dividends are good for getting an income or the dividends can be reinvested to grow your capital. Dividend income is taxed at a different rate from savings interest. Smaller companies often don’t pay dividends. They may have more chance to grow rapidly, but can be more risky. The price of a share will go up or down if people change their minds about how well the company is performing. If a share price reduces then the value of your investment reduces as well. However shares have historically provided better returns over the long run than the other main asset classes: property, cash or bonds. Holding shares in just one company is very high risk. If that company gets into difficulties then you could lose some or all of your money. You can spread your risk by diversifying buying shares in a variety of companies, and investing in other assets or countries or by putting your money into pooled investments like unit trusts. If you want to buy and sell shares that you own yourself, you can use; a traditional stockbroker, an online broker and a financial adviser or investment manager.