One of the most searched for personal finance queries online is “how to buy shares”. The idea of buying individual shares has a romanticised image of finding the next Netflix and making large amounts of money, but we know it isn’t really that straightforward.
If it was that simple everyone would be doing it, and there’s a reason people talk about “losing their shirt” on the stock market.
So, is buying shares best left to the professionals?
The actual act of buying shares is relatively straightforward. These days you can buy shares quite easily through an online broker or trading app.
This has led to an influx of people promoting things like share dealing and forex trading to get rich quick – but the reality can be very different.
It may not seem as exciting, but we believe setting up a direct debit into a properly diversified investment portfolio remains the best way to increase your wealth over time.
While it’s easy to buy a share, identifying a future performer is difficult. It’s easy to think in retrospect you could have invested in Amazon twenty years ago and made a fantastic return, but for every Silicon Valley company that makes it there are thousands that go out of business entirely.
As an individual investor, you probably don’t have access to the information you need to properly understand a business – things like its revenue, profits, future projections and the wider context of the industry it’s operating in.
We believe in diversification – the strategy of spreading your investment across a range of industries, asset types and geographic areas. This still gives you exposure to a range of shares but crucially looks at factors that could keep your investment growing even when parts of the market fall.
For example, if you were to invest in Facebook, Amazon, Apple and Google, they’re all technology companies. So, if there’s a change in regulation or the economy that hurts the tech industry, the value of investments in technology companies could fall.
If you’re thinking about buying shares, it might be worth talking to a financial adviser about your goals first. If you’re trying to build long-term wealth, putting your eggs into one basket is never a wise idea.
True Potential Wealth Management offers restricted financial advice. Our service is specifically designed for clients wishing to access their financial affairs online. With investing your capital is at risk. Investments can fluctuate in value and you could get back less than you invest. Tax rules can change at any time. Please be aware that this communication should not be considered as financial advice.
True Potential Wealth Management LLP is authorised and regulated by the Financial Conduct Authority. FNR Number 529810. Registered Head Office: Newburn House, Gateway West, Newburn Riverside, Newcastle upon Tyne, NE15 8NX. True Potential Wealth Management is a Limited Liability Partnership. OC356611.
Back to blog
