A basic guide to stocks and shares for beginners

The most important thing a person needs to understand about investing in stocks and shares is the risk involved. It is not just a case of putting your money in to something and getting a good return for your efforts. Even low-risk investments, as the name indicates, have some small risk attached and in order to get the most from your investing you will need to understand and accept this risk.

If you have particular stocks and shares in mind you should do as much research in to them as possible before parting with your money. Find out how the company's finances are, did they survive the recession and most importantly is the economy thriving in the company's industry. This sort of information can help you work out if the company's stocks and shares can expect good growth or if they are about to plummet. Of course, even good results will not stop share prices dropping if something happens but at least you will be making an informed decision. Successful investing takes time and analysis.

Once you become more familiar with stocks and shares you will become a better judge of the market as a whole. You should also consider outside influences, which are out of your chosen company's control can also affect share prices. Therefore it is important you assess the environment around your favoured company before taking the plunge. Seeking the advice of an investment advisor can only be a good thing for an investing novice. Not only will they use their experience to try and secure you a sound investment, they can also advise you on important taxation issues once your investment is making money.

You should never approach investing in stocks and shares from a gambling viewpoint. Your sole intention is to invest and make money with the minimum of risk.

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