Share dealing

Chapter 1: What is share dealing?

This video is for educational purposes only. This should not be viewed as advice or a recommendation to invest.

You might have heard of the phrase share dealing, but what is it? Well, share dealing is basically buying or selling shares in public companies with the goal of growing your investment over the long term. Think of it like walking through a market.

The value of an investment may go down as well as up and you could get back less than invested.

Each store represents a company, but instead of buying their products or services, you're buying a small piece of the business itself. That's called the share. So how does share dealing work? Shares are traded on stock markets around the world, where a company's based usually decides which market it's listed on.

Here in the UK, for example, that's the London Stock Exchange. Each share has a price based on what investors think the company's worth. It's influenced by things like the company profits, its growth potential, and global events, and that price isn't fixed.

It moves throughout the day, depending on news and how many people are buying or selling. You've also probably heard the phrase buy low, sell high. It's a simple idea.

The cheaper you buy your shares, the more potential you have to make a profit when you sell it. Some companies pay dividends too, which is a small payout to company shareholders, a bit like a thank you. Over time, investing in shares can offer better returns than just keeping your money in a saving account or cash.

That's why they're often part of long-term plans like pensions.

Of course, there's risk involved. If a company doesn't do well, the value of your shares can fall and you might get back less than what you put in.

And it's not just about individual companies. Entire markets can shift depending on what's happening in the economy or around the world. That's what we mean by market volatility.

Shares are best seen as long-term investments, ideally for five years or more, so they have time to grow and recover from short-term changes. I always tell people, buying shares is like planting a tree. You don't check it every day, you let it grow.

This video is for educational purposes only. This should not be viewed as advice or recommendation to invest. Investing offers the potential for better returns than cash savings over the long term (5+ years).  

But there are risks, the value of your investments may go down as well as up, and you may get back less than invested.  If you want advice on investment choices, then we’d recommend speaking to a financial adviser. There may be a charge for advice.