Introduction to Shares

Guide: Getting started

How do I go about investing in shares

There are four broad methods of investing in shares, only one of which involves you picking and buying them. Each way has different levels of involvement, and the corresponding risks and returns of each will vary. It is perfectly acceptable and very normal for people to hold investments in a range of vehicles.

Tracker Funds

The lowest level of research and involvement is to buy a tracker fund. These funds will closely mimic the performance of a certain index like the FTSE 100. Annual management fees tend to be quite low as you are not getting the benefit of the expertise of a fund manager.

General Funds

A bit more research is needed to select a General UK Fund. These type of funds invest in a broad spectrum of shares. Before selecting one you should be careful about looking over its past performance against the market as a whole. This is a more alternative to a tracker fund.

Specialist Funds

These require more involvement from you. They specialise in certain regions or sectors such as Asian markets or mining stocks. These funds can get you into markets which would otherwise be difficult to access. The fund managers will give you the benefit of their expertise in their specialist field. These are typically the most expensive funds

Direct Investment

One of the fastest growing area of equity investment is buying shares directly. This is typically the cheapest way to invest as it has the advantage of cutting out the middle man. Virtually all other investments are based on someone investing in shares on your behalf.

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