Share dealing UK - online information and services

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If you are new to share dealing in the UK, there are a few factors to consider before investing your money online. To begin with, you need to calculate how much money you have available to buy the shares. Remember that share value can decrease as well as increase, so make sure you aren't investing money that you cannot live without.

Next, have a think about how long you want to invest your money for. Are you looking to create an income from your shares through dividends, which are paid twice a year, or do you want to create a lump sum through the increase in share value (capital growth)? Perhaps you want both an income and a lump sum. Asking yourself all of these questions will help you determine the type of portfolio that you want to put together.

Although share dealing is always going to pose a certain amount of risk, there are ways to minimize the possibility of losing money. One way is to invest in 'blue chip' companies. A blue chip is a well-established, highly successful company with a good track record on the Stock Exchange. Although its share price will reflect this level of success, these companies offer investors a more secure option, although even this can never be guaranteed.

Another way to minimize risk when share-dealing is to spread your investment over a number of different companies and industries. By avoiding the temptation to 'put all your eggs in one basket', you avoid losing your entire investment wealth should one particular company or industry suddenly come crashing down.

Online share dealing

As with any internet transaction, there are certain things that you should be aware of when buying or selling shares online.

Firstly if you are trading via a stockbroker, either an individual broker or a company, always do your homework. If you have never heard of the company, check with the Financial Services Authority that they are authorised to carry out a deal on your behalf (FSA consumer helpline: 0845 606 1234).

Sharedealing websites should be encrypted to protect you from fraudsters when performing a transaction. Make sure that the website offers security, and always double-check the details of any transaction before confirming you want to go ahead.

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