The Basics of Share Dealing.

Many people these days are interested in investing in stocks and shares. Share dealing can be fun and financially rewarding. It can also be a cause of worry and financial loss.

Disclaimer:
This information is purely for educational purposes and is not an invitation to trade in shares. There are no guarantees and at the end of the day it is You who is the decision maker and any outcomes are the result of your actions. The content of this text is based purely on the opinion of the author. Make of it what you will.

Lets begin ...

To start trading in stocks and shares You will need the following as a minimum:

Starting capital (money) of at least £1,000 Opinions on this figure vary greatly.
You must be able to stomach losing some or all of this money.
Be aged 18+
Have a current account (bank account).
Have a computer with an internet connection.
Have time during the day to connect to the internet.

What are stocks and shares?

Stocks are basically companies such as Vodaphone that are listed on a Stock Exchange. There are many Stock Exchanges around the globe. We will focus on the London Stock Exchange (LSE). Each Stock is represented by a number of Shares which can be bought and sold in the Stock Market. There are only so many shares of each company available.

In the Stock Market there are Market Makers who hold the stock of each company and buy and sell it to and from investors. However, we investors cannot deal directly with the Market Makers so we have to use a Stock Broker.

Getting a stock broker.

There are many stock brokers to choose from. A popular online stock broker is E*Trade. Many people however prefer to deal with a human being and choose a traditional stock broker firm. To research the many options available it would be wise to read some of the periodicals such as Investors Chronicle or Shares magazine. Another idea is to check out the opinions of others on discussion forums.

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