First group. If you have a good amount of money you can buy the right share at the right time and makes lots more money. And it doesn’t have to be an obscure share to make lots of money. My best share purchase was buying Legal and General on 20th February 2009 at 36.88p- they’re now 241.2p. That’s a rise of nearly 660% in five and a half years! I bought BT on 29th April 2009 at 89.39p- both these totals have all stamp duty and costs included. They’re now 382.6p and have been higher. Now I haven’t really got a LOT of money overall, but does make me happy that I can make good gains on the money I have- and you can do the same!
Second group. You just have an interest in shares! You may well work for one of the companies written about, or they may be your competition. So you want to know overall how they doing. I read lots of share articles every day. I’m mainly bothered that you read MY share articles to be honest, but there are lots of other good ones out there. Some are quite entertaining and informative to read.
Third group. You want to buy shares... but don’t have the money yet. That’s fine, many people were like this at some point. Let’s look at my ‘share history’. To be strictly accurate, the first time I ever bought a share was when I was fifteen years old in 1998. My dad said I had too much in cash and said I should buy some shares. He gave me a share magazine to look through and I selected Manchester United without knowing anything ‘fundamental’ about the share. My dad approved and bought some as well. I made good gains from it- over 100% if I remember rightly, but I never even really checked the share price. I first consciously bought my own shares in 2005 after reading a lot about them. Was quite hard to open a sharedealing account then- I believe it’s easier now. I could only put in relatively small amounts of money at first but it built up over time. I ran ‘virtual portfolios’ for a bit but moved onto buying real shares fairly quickly. So you can do the same- ‘buy’ some shares you have researched in a virtual portfolio. There are plenty of sites on the internet that will allow you to do this. Remember though, to be truly accurate you should add stamp duty of 0.5% onto your purchase price, plus the dealing costs- some of these virtual portfolios won’t do that for you. You may have to pay a small ‘spread’ on top of the normal buying price too- but personally now with the share dealing service I use I get good prices where I don’t have to.
Personally I would say start investing in shares as soon as you can, or as young as you can. That’s what I did. Even if you only make OK gains from the start, or even if hypothetically you only made as much money as you would from your bank account, I would still say it’s worth it for the experience of learning about shares. To be honest, you would have to be doing badly to make only as much from a bank account at the moment. There are literally millions of people in the UK who have 0% saving rates in their current accounts. There will be millions of others who will not be getting much more than that. In terms of anything like an instant access account you will be lucky to get more than 2% per year, and then you will have to pay in a certain amount every month and only get that kind of interest up to a set amount. There are plenty of decent shares out there with yields over 4.5%, where you will get paid four times a year or twice a year, instead of just once a year usually from a savings account.
All I would say is make sure you can put away at least £1000 ideally, and that you won’t need that money for a MINIMUM of one year. For a new investor I would say at least two years to be honest. I personally haven’t sold any shares for over seven years- the longer you hold them the better!