Stocks and Shares

Most of us will have heard or had some involvement with stocks and shares.

Shares also known as stock or equities, are the unit of investment in individual companies.  They have a nominal value, for example 50p, which when multiplied by the total number of shares issued forms the issued shared capital.

Equity investment can involve anything from investing directly in the stock of a single small company, to investing in a fund that represents global markets and thus buys a very small element of hundreds or thousands of companies i.e. investment risk is distributed.

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

Where can you buy them from

Shares are offed in a variety of ways: you can buy then 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.

The value of investments and income from them can fluctuate (this may partially be the result of exchange rate fluctuations), and investors might not get back the full amount invested. Past performance is not a guide to future performance. Equity based investments do not afford the same capital security that is afforded with a deposit account.