What are Stocks and Shares? - The Share Centre

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Stocks and shares – what are they?

Shares, also known as stocks or equities, are the unit of investment in individual companies. They have a nominal value, for example 5p, which when multiplied by the total number of shares issued forms the issued shared capital.

The nominal value bears no resemblance to the market price, which will rise or fall according to the laws of supply and demand, driven by the attractiveness of the company and its performance.

Stocks and shares offer flexibility

With stocks and shares it's possible for investors to create wealth in three different ways:

  • To receive an income from them in the form of dividends
  • To hopefully see a growth in their value and sell them at a profit
  • A combination of the above, known as balanced

Stocks and shares offer choice

Shares offer as much variety as there are entrepreneurs and companies attempting to create profits in the economy. There are thousands of companies in UK markets, some of which are also listed in foreign markets (dual listed).

And there's an entire spectrum of investment possibilities available to investors – from high-risk, high-growth shares to steady blue chip companies.

Stocks and shares can be bought in a variety of ways

Shares are offered in a variety of different ways: you can buy them in individual companies, you can put different ones together and build your own portfolio or you can buy them through collective schemes such as Funds or Investment Trusts.

Buying and selling shares through The Share Centre

Buying and selling shares through The Share Centre is straighforward. Simply open a Share Account or ISA, deposit enough money to cover your investments and you can buy online or by phone quickly and easily.

Stocks and shares offer different levels of risk

Before you start investing it's important to decide the level of risk you are willing to accept. As a rough guide, cautious equity investors might like to consider a portfolio of solid blue chip investments. Whereas more adventurous equity investors might think about investing outside the FTSE in riskier markets, like the Alternative Investment Market (AIM).