How to invest in the stock market is one of the internet’s most searched for terms, and as you expect there’s many answers. You can invest in shares of companies in a variety of ways, for example, on an investment platform, through an online broker with a financial adviser. From there you can choose to invest in a range of financial instruments including individual stocks or funds. Stocks are small parts of companies, whereas funds are collections of stocks and other assets. Whatever way you choose to invest in the stock market, it can be an effective way in the long term to grow your money.
So, with so many options to invest in the stock market, what do you need to look for? Fees will matter, as this will eat into your investment returns. Performance also matters, although past performance isn’t a guide to future returns. As for what to invest in, keep in mind that investing in individual stocks is especially risky, as with investing the value could go down as well as up. What you can do to manage risk is look to investment funds in diversified portfolios. In this type of investment you aren’t putting all of your eggs in one basket.
Investing in this way is straightforward, and in reality, you probably already invest in the stock market this way through your workplace Pension. You can also invest in diversified portfolios with Stocks & Shares ISAs and Personal Pensions in a tax efficient manner, or with a General Investment Accounts, and can do this through financial advisers or directly through online brokers.
One of the best things about investing into the stock market through funds is that you don’t have to make the decisions on what stocks are best to buy. For example, at True Potential, the Investment Management team actively manage diversified Portfolios seeking to minimise risk and maximise returns. With the True Potential Investor app you can invest from just £1 through impulseSave®, on a defensive to aggressive attitude to risk scale.
So to summarise, investing in the stock market is straightforward through an investment platform such as a bank, an online broker or financial adviser. What can be more complicated is deciding where to put your money. Individual shares can involve higher fees and are riskier. Funds and Portfolios offer diversification, as your eggs aren’t all in one basket. This can also offer better value than individual stock picking, as you can gain exposure to many asset classes at one price.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. Past performance is not a guide to future performance. Tax rules can change at any time. This blog is not personal financial advice.
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