Investing in shares means buying and keeping them for a while in order to make money. There are two ways of getting money from shares of a company:
if the company grows and becomes more valuable, the share is worth more – so your investment is worth more too some shares pay you part of the company’s profits each year, called a dividend If you buy shares in larger, long-established companies you’ll probably get dividends, but you may not get rapid growth. Shares that pay regular dividends are good for getting an income or the dividends can be reinvested to grow your capital. Dividend income is taxed at a different rate from savings interest. Investing in shares through a pooled (collective) fund
In a pooled (collective) investment, lots of people put their money into a fund. The fund is invested in shares – or other assets, like cash, property or bonds – chosen by a professional fund manager.
You can invest in funds through many banks, a fund manager, a financial adviser or a traditional or online broker. Shares can be risky
The price of a share will go up or down if people change their minds about how well the company is performing, or about the economic conditions it operates in. If a share price reduces then the value of your investment reduces as well.
However shares have historically provided better returns over the long run than the other main asset classes: property, cash or bonds.