| To invest in the stock market do you have to be | | | | say property, or commodities, shares in Japanese |
| rich? Not at all. The stock market is, after all, just | | | | companies, US smaller companies and so. The list of |
| another form of investing. Having said that, unlike | | | | available trusts is huge, and varied. |
| putting your money in to a bank or building society | | | | This method of getting into the stock market is ideal |
| account, returns are by no means guaranteed. In | | | | for smaller investors, especially as many trusts allow |
| fact, in extreme cases a company`s shares can be | | | | units to be purchased monthly by direct debit. The |
| worthless if it goes bankrupt, and investors can lose | | | | minimum amount can sometimes be as low as £10 |
| all of their money. That`s why it is worth repeating | | | | a month. That money is then used to buy units in the |
| never to invest what you can not afford to lose. | | | | plan of your choice. Doing it this way means you are |
| When you invest in a building society account you will | | | | benefiting from something called `pound cost |
| periodically receive interest on your savings. When | | | | averaging` which means that when the shares (or |
| you buy shares, however, you may receive | | | | units) are low in value you get more for your money. |
| dividends. The value of those dividends often | | | | On the other hand of course when the shares (or |
| fluctuates in line with how well the company is doing, | | | | units) are higher in value you get less of them for |
| and sometimes a company might decide on occasions | | | | your money. Overall though pound cost averaging |
| not to pay a dividend to shareholders. Hopefully | | | | helps to smooth out the peaks and troughs. In |
| though you can expect to see the value of your | | | | addition, investors have to remember that fund |
| shares increase over time. This is particularly the case | | | | managers don`t work out of the goodness of their |
| where investors take the medium to long term | | | | hearts. There are charges involved, sometimes up |
| strategy and hold on to their shares to ride out the | | | | front, sometimes they come out of the value of the |
| rough times when markets are faring badly. | | | | shares or units at certain intervals. |
| One method of accessing the stock market for the | | | | Essentially it simply means you are drip-feeding your |
| smaller investor is through Unit Trusts, or an Open | | | | money into one or more of the available trust plans. |
| Ended Investment Company (OEIC). Both these | | | | During a time when markets are volatile that can be |
| forms of investing are designed to pool funds of | | | | a very good time to benefit from drip-feeding. |
| investors' money, which are then used to buy a | | | | Although it can never take the risk out of buying |
| range of shares, gilts, or bonds. A fund management | | | | shares, it can at least reduce the risk. |
| company might be involved in purchasing shares in | | | | |