Tips for trading shares online
It can feel intimidating at first when trading shares online. However, with the right approach it is possible to learn the best ways to trade online.
Important
Before you buy any shares, you need to think about your budget. It is vital to ensure that any money you invest with won’t put your home or savings at risk. It is also recommended that you work with an established broker, as this will give you the best chance of getting advice on when to buy and sell.
Options
Shares (as the name suggests) is a part of a company- you can either own these yourself or join with other investors as part of a fund. The latter can be a safer option, as this means you are not dependent on the success of one individual company.
Timing
When you buy or sell shares can vary. Different circumstances can affect the value of shares (sometimes all it can take is someone to say the wrong thing at the time!)
It is recommended that you should invest in shares for around five years, as markets can rise and fall during this time. If you need access to funds during this time, it may be better to have a separate savings account alongside the shares.
It is also recommended that you avoid putting your money into one individual company, for the fact that if this particular company goes bust then you could lose all your investment money.
Making money
There are two ways to make money from your shares- when you sell them and dividends. A dividend is a repayment on the interest your shares earn, either as a one-off or as regular payments. Also, the first £2000 you earn through dividends is tax free, after that your dividends will be taxed depending on what tax band you are in.
Be scam aware
Don’t invest in a share from someone who cold calls you or contacts you through an unsolicited email (these are often referred to as “boiler room” schemes.) You should only invest with a recognised broker or website.
Risk, reward and review
With any investment, generally speaking if you want higher returns, you also have to accept there will be higher risks involved. It is also important to review your investments on a regular basis, looking at the level of performance of your investments in your portfolio.
It is also important to avoid over-reacting when the market changes. People can often be tempted to buy or sell because everyone else is. A good broker should be able to help you gauge the best times to buy and sell in order to maximise the best chance of getting the best returns.
We can help
At Larcomes Financial Services, we have an experienced team and the resources to help guide you through the options available, helping you to learn what investments would be best suited to your particular needs and financial circumstances. For more information, please contact us today.