Buying shares or investing in shares is a relatively simple process due to the emergence of online execution only brokers. It can be as easy as selecting your broker, creating an account, selecting share and confirming the trade price. When buying shares, there are a few key considerations as follows:
Chosing a broker and buying charges
Be sure that the online broker you chose is regulated by the Financial Conduct Authority. It is important to use a broker that you trust and are confident in. Brokers typically tend to deploy the following charges when buying shares; commission per trade and possible annual custody / administration fee associated with your account. If you are expected to be a frequent trader, look out for those brokers that offer more favourable rates when a certain number of trades are placed per month. UK share purchases are also liable to stamp duty, although this duty was removed in April 2014 when buying shares in AIM-listed companies.
Selecting your account type
You can hold shares in a regular share account, but you can also hold them in an ISA or SIPP. It is commonly suggested to use your ISA allowance if you chose to invest in shares as there will be no capital gains tax liable.
When buying or selling shares you should be presented by a real-time prices by your online broker on your selected share- giving you a period of time (15-20 seconds) to confirm the price to buy or sell a particular share at.
Always do your homework and have full confidence in any share that you chose to buy. Investing in funds can also provide a less risky alternative to investing directly into a single share.