Investing in the stock market

There is a wealth of information about investing in the stock market available on the internet and elsewhere.  I have attempted to select some of the best online resources here.

Investing in the stock market has many advantages over investing in property:

  1. Low cost – the costs associated with investing can be very small
  2. Liquid – assuming you choose the right investments, they are quick and easy to buy and sell
  3. You can start with small amounts and build your portfolio gradually
  4. Generous tax treatment – you can receive tax relief including cash “boots” with some investment products
  • Can spread risk by investing in different asset classes, countries or sectors

Admittedly investing in the stock market can require a bit more specialist knowledge if you wish to understand what you are buying compared to investing in property, and perhaps it is this aspect that deters many people from doing so.  However, people should bear in mind that many of them may already be investing in the stock market indirectly via their company pension schemes.

Stock market investments are also more volatile than property ie prices can fluctuate significantly even over short periods.

However, in my view the advantages of investing in the stock market far outweigh the negative aspects, particularly when you maximise the tax advantages by investing via ISAs and pensions.

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