How to Start Investing in the Stockmarket (UK Edition)

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Investing in the UK Stockmarket can be a great way to turn your spare cash into even more spare cash, providing you know what you’re doing. Especially as interest rates in your average Savings Account are still not much to get excited about unless you’ve got the spare cash to stick in one of those fixed term accounts that usually require a minimum £500 investment that you can’t touch for between 2 to 5 years.

However there seems to be a fair few people around who seem to like the idea of investing in the stockmarket but don’t have a clue where to get started.

This blog article is mostly intended as a primer to show people like that based in the UK where to look rather than a mighty tome of all necessary knowledge.

The first thing you’ll need in order to start buying and selling shares is an account with a reputable company offering such services, some of which include (but aren’t limited to)……

It can usually take a week or two to get the account approved due to anti-money laundering checks and all that jazz, but as it’s generally best not to go rushing into buying shares without properly knowing what you’re doing, it gives you more time to finish preparing.

The next thing you’ll need to do is some research into finding potential companies to stick your money on. There are an assortment of websites for doing this at, including:

Any idiot can open a share dealing account, but you need to know what you’re doing and what’s going on to have a hope in hell of having some success with it.

There are also a number of websites you’ll need to read in order to make sense of the information on the websites above you need to read to figure out what to invest your money on, as they can explain it to a much greater extent than I can (even after 14-years experience dabbling with moderate success on a very limited budget).

In addition, there’s also a handful of books it’s worth your while reading to fully understand investing in stockmarkets, a small handful of them are British, but most are American but the principals are pretty much the same.

  • The Naked Trader (Robbie Burns)
  • Warren Buffett Accounting + Warren Buffett’s 3 Favourite Books
  • Investing in Shares for Dummies
  • Dividend Stocks for Dummies
  • Penny Stocks for Dummies
  • 100 Baggers (Christopher Mayer)
  • Common Stocks and Uncommon Profits (Philip A. Fisher)
  • The Little Book of Value Investing
  • The Little Book that Beats the Market

Traditionally at this point I would also recommend playing a Virtual Stockmarket Game in order to have a tinker with while you learn the ropes, unfortunately the best UK based one I found called BullBearings went belly-up a year or two ago because it got too freakin’ expensive to buy in the real stockmarket data to base the game off of, and I haven’t really found a suitable replacement yet.

That’s essentially all there is to it, apart from other basics to bare in mind:

  • Brokers charge a fee every time you buy or sell, therefore the more you buy/sell the more it eats into any profit you might make.
  • Value of shares can go down as well as up, and cause you to kiss your money goodbye, which is often a more likely scenario while you’re learning the ropes.
  • It’s still possible to make a loss even if the data looks right in the forecast, due to things like surprise bad news + company problems they kinda didn’t make public.
  • Beware of over-ambitious growth forecast figures when reading the company forecast in the financial blurb on the research websites I listed.
  • Some companies offer growth on their stocks and no dividend, others offer slow growth with a dividend, some offer no growth and no dividend, or shrinkage but at least there’s a dividend.
  • A Dividend is where companies pay out a chunk of the company profits to shareholders based on x-amount per share held (e.g. 1p per share, 10p per share, 45p per share, £1 per share) so for instance if they’re paying out 10p per share and you own 14 shares in the company you’d get £1.40
  • UK Stockmarket prices are quoted in pence: 20.00p = £0.20, 245.00 = £2.45, 3256 = £32.56, etc
  • US Stockmarket prices are quoted in Dollars and Cents, and require some form filling to investing them from the UK if you’ve got the money to do it (sticking with UK share cheaper if on a budget)
  • Don’t buy just because some muppet gave you a “hot stock tip”, chances are they’re talking crap or it’s long since fizzled out, but still research it anyway like you would any other company you’re thinking of buying a portion of just to be sure.
  • The UK Stockmarket consists of: FTSE 100, FTSE 250, AIM Index

Examples of UK listed companies you can invest in (but don’t take my word for it) include, but aren’t limited to:

Company Name Ticker Symbol
Intercontinental Hotels Group IHG.L
Greggs GRG.L
SportsDirect SPD.L
National Grid NG.L
Admiral Group ADM.L
Sainsbury’s SBRY.L
Marston’s PLC MARS.L
Avast AVST.L
BP BP.L

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