Share Dealing

Historically investments in stocks and shares out perform savings accounts over most periods of several years.  It is, of course, possible to lose some or even all of your investment when share dealing.  However, provided shares are held over a long enough period, and your risks are spread across a range of different companies and market sectors, Share Dealing is generally recognised as a sound means of earning a return on your investments.  There are two basic means of earning money from shares: dividends and capital growth

Share dividends are declared from time to time for each company you hold shares in according to the performance of the company.  Typically dividends are paid twice a year as interim and final dividends.  The value of dividends will vary - they may go up or down and may not event be paid at all.  Additional dividends may be paid under various special circumstances.  Dividends are paid out by check or direct payment to your account, or in some cases, you may be able to opt for scrip dividends - these take the form of extra shares.

Capital Growth may be accrued if the price of your shares increases - it may of course decrease.  You may make money by selling your shares at a higher price than you paid for them.  In general the better a company performs, the more likely it is that its shares will rise compared to the share of similar companies.  Ultimately all share prices are driven by demand - the more people who want to buy a particular share, the higher its price will be - if people are trying to sell, the price will fall.  Speculators may gamble on the future prices.

When buying and selling shares, there are different prices quoted for buying and selling - the selling price is usually lower than the buying price at any given time. 

How to Buy and Sell Shares.  There are costs associated with share dealing.  You are buying and selling a share of a company - consequently everything has to be properly recorded and registered.  When you buy and sell shares, a share certificate will need to change hands - this is a valuable document that physically represents your shares.  To buy and sell shares you will need to go through a share dealer or Stockbroker.  You will usually be charged a commission - a fixed sum, a percentage of the value of the deal or a combination of the two.

Stockbrokers and share dealing services may be found online - compare a few to find those offering the services you require at the best rates. 

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