You can buy shares online these days. That's the most convenient way - unless you like talking to people on the phone. Big banks, plus financial services companies, have online share trading facilities. There are loads of them. (I give a couple of examples below.)
Income from shares is taxable, so a good way to do things is to trade your shares from inside an investment ISA (ie, tax free).
ISAs usually forbid the buying and selling of shares from certain "markets" eg AIM, which is the London Stock Exchange's market for smaller companies that are growing, so you'll need to check that the shares you want to buy aren't blocked from being traded inside an ISA.
If you are outside the tax-shield of an ISA, you can trade pretty much any share.
ISA or no ISA, you'll be charged a fee for each share "trade" that you make - in other words you'll pay a fee each time you buy, and a fee each time you sell.
I don't trade shares at all, but I know people who do. Here are a few things that the experienced ones preach:
1. Don't put money into shares that you can't afford to lose - it's a gamble;
2. Always keep an eye on your shares. The moment you stop watching them you have lost control; I know a guy who stuck all his inheritance in shares. Guess what happened?
3. Some people swear by "Sell in May, then go away." Statistically, shares tend to lose value in the summer, when the traders go away somewhere swanky and guzzle Boli. The shares go up again in the autumn, so buy your shares back in September and watch them go up! For people like us it means we can mess about for the summer, driving 2CVs to Spain etc without a care in the world!
4. Have an exit strategy. In other words, put instructions onto your shares that will trigger a sale if the value fluctuates. Decide how much you want to earn on them, or how much loss you can bear. Instruct your broker (an online instruction, usually) to get rid of your shares when they hit a certain % gain or loss compared with your purchase price. However, markets are very volatile these days (because of the sheer number of trades facilitated by online trading plus the uncertain state of the western economies) so you may need to build in quite a wide tolerance to fluctuation in the short term.
5. Don't get greedy! If your shares go up by a healthy amount, crystalise your gains and feel good! Hold out for more gains and you'll end up watching them take a dive. Then you'll feel bad as you only think about your losses... this is the losing strategy most bad gamblers get into.
6. IMPORTANT: Get to know what you're doing by educating yourself before you get into share buying. Good places to start are:
-
Interactive Investor- V basic info at
Money Saving Expert. Note that the article is out of date, but it's OK for basics.
- Major banks have info, eg
Barclays. As mentioned above, they also have online share trading departments.
- Financial service companies like
Hargreaves-Lansdown have stacks of information.
7. Spread your bets. As a general rule, holding 1 investment is riskier than holding 2. And 3 is safer than 2. 4 is better than 3 and so on. This is because all investments do not react in the same way to the same economic conditions.
Basically, educate yourself before you dive in. Hope this helps! As I said, I don't invest in stocks and shares (no money, not interested enough) but I do know people who do. It takes a certain sort of person. It's not for everyone. But for some people (those who get a bit of a semi when they think of Las Vegas, basically) it can be very rewarding and enjoyable.
