How does someone go about buying shares? For example, in Cadbury's Schweppes PLC??

Question

And how would I check how the shares rise / fall and when is a good time to cash in?? I'm new to this, so i don't know the technical terms... sorry!

Answer 1

Start by reading up on the Stock Market - don't just start buying shares you see 'tipped' in the newspapers = you will loose your shirt !

You should start by putting at least 10% of your earnings into your Pension (Company plus either AVC's or a SIPP) since you get Tax Relief on your contributions (in fact, if you pay tax at 40% you might want to consider putting all your Salary that is taxed at 40% into you pension).

If you still have some spare funds available ...
Due to the cost of buying & selling, the minimium ammount to buy would be approx £500 at a time (£1,000 is better).

To avoid loosing all your money on one bad share, you need to hold about 10 - so before your start you need to have £5,000 to £10,000 or more to play with ..

To protect yourself from Capital Gains Tax, you should buy & sell using a 'Stocks & Shares ISA' wrapper (you can put in a maximium of £7000 new cash per year).

Most Buliding Societies and Banks (eg. Barclays) offer Stocks & Shares ISA's .. DON'T just go for the one with the cheapest dealing charges = there are all too many scams and rip-offs out there on the web trying to suck you in - check the 'Management Charges' / 'Annual Fees' etc first. and 'spreadsheet' some 'what ifs' (eg. 'what if i make 20 buy/sells of £1,000 each per year plus charges ) in order to compare the different deals.

Answer 2

You can buy shares through most banks. There will be a fee of about £12 or so for each transaction. Remember, they can fall dramatically in value and you can lose a lot of money. If you are in employment, ask the company secretary if there are any schemes whereby you can buy shares in the company. As an employee you will usually get them at a special low rate. Best thing is to find a few like minded people and form a shares club. You each pay ion ,say £25 a month, then jointly decide what tio buy shares in. It can be great fun, and there is always someone else to blame if they fall in value. Share prices are listed in most daily newspapers.