How To Invest In Stocks And Shares
| Business : Investing When it comes to investing in stocks and shares, you first need to decide which companies you want to invest in, of course. There are various options, you can own shares through a nominee account where a large dealership does all the buying and selling and the shares are in your name - this is how most things work for ordinary private investors. You can also choose rather than buying stocks in a specific company to buy into a tracker or index fund of some sort, this is a large portfolio of many shares that should track the market by and large, so if it goes up then your money effectively increases, and if it falls... well then so does your money. If you buy shares yourself then people tend to suggest that you buy into a few different sectors (though pick ones that are expected to perform well of course!), this is because it should spread the risk a little. Often there is a phenomenon whereby companies in the same sector rise and fall together. For instance bad news for one company can often bring the whole sector down, even if it's very specific to the company, as market sentiment is everything (in other words reality often isn't the most important factor in where prices are at). By having ownership of shares in different sectors you can help minimise the risk of this, so if one sector goes down perhaps one of your others will go up, and so on. Of course at any one time there may be sectors that appear more or less attractive then others.
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