February 2007
Online Share Dealing
At the last count, there were 1,606 companies listed on the London
Stock Exchange and 1,634 trading on the Alternative Investment Market
(AIM). That means anyone interested in buying shares has more than 3,200
stocks from which to choose.
Are you keen to invest in shares because you want an annual income, or are you looking for big capital gains? How much money do you want to invest? And is this spare cash or a nest egg you have set aside for a rainy day?
Buying Shares
Shares can be bought in several ways - through a bank or stockbroker,
over the phone or online, through a full advisory broking service, or
on an execution-only basis. Full advisory services are costly, but the
broker will look at your investment aims, tailor your strategy and tell
you what shares to buy.
For even more cash, a discretionary broker will buy and sell shares on your behalf. Execution-only brokers offer research tools and generic help, but do not give personal advice on stock picking. With this sort of service, the broker simply takes the order and executes the trade.
The most important things to consider when choosing an execution-only broker are charges, the markets covered, and speed of transactions. Trading cost vary widely between online brokers - from about £7 for a one-off trade, to up to £30 for trades of £20,000 and over.
Many brokers, such as Motley Fool, offer a cheaper alternative. Investors can set up an account and then have the option to trade shares on four set days each month at £1.50 a time. The London Stock Exchange also has a 'locate a broker' help section on its website.
However you choose to buy your shares and whatever shares you choose to buy, there are guidelines which can help you make more good decisions than bad ones:
- Research the company so you know how it has performed and its strategy for future growth.
- Find out whether the management has a good track record.
- Look at how the share price performed recently and think about whether there is still room for it to grow further.
- Check in the newspapers and online to see if anything relevant or interesting is happening with your shares.
- do not invest unless you are prepared to keep your money in the market for at least five years.
- Creating a balance portfolio is always sound advice.
Interactive Investor
Buy and sell shares with the "Best Online Share Dealing Provider
2006" Interactive Investor has the information, tools and services
that you need to trade Shares online. On Interactive Investor you have
the ability to track performance and trade or place orders directly
24 hours a day 7 days a week. Not only is it easy to use, it’s very
competitive at just £10 per trade for UK shares. Key Benefits:
- £10 flat fee for UK trades with no hidden charges.
- £15 flat fee for US trades on the New York Stock Exchange and NASDAQ.
- Online and telephone trading at no extra cost.
- No account management charges.
- Extensive range of automated order types with their new TradePlan service.
- Free email alerts.
- Transfer your existing shares into their easy to use service.
- Award winning portfolio.
