A guide to buying investments
- 4 min reading time
You’ve decided to invest, but how do you actually buy an investment? Read our guide to get started.
What you will learn
You have thought about your personal goals, the level of risk you’re willing to take, and how much money and time you have available. The next step is to think about how to buy an investment.
You may want to do this yourself or seek expert help. This decision will be influenced by how much money is being invested and you can read more about the pros and cons of both routes here.
There are many types of investment and just as many ways to buy them. For some, you can do the legwork yourself. If you’re considering buying property, begin by talking to local estate agents, looking at property ads and apps or by going along to an auction house.
To build a portfolio of individual shares you’ll need to use a stockbroker – a professional agent who is licensed to buy and sell stock market investments on your behalf. Some stockbroking firms and banks offer a phone or branch-based share dealing service, but online services are more common and may be cheaper.
These online platforms enable you to buy and sell shares from all the companies listed on the stock exchange, as well as invest in other assets and funds.
Did you know?
The total value of UK equities traded in 2016 was £5.38 trillion.
While it’s possible to save some money by making the investment decisions and doing the dealing yourself, fees will still influence which investments you choose and where you buy them. You can read more about the cost of investing here.
Expert guide to funds
If you don’t want to pick individual shares yourself, you can invest in funds that will do the job for you. An expert fund manager chooses and manages multiple shares on your behalf, ensuring you don’t put all your eggs in one basket.
Multi-asset funds, meanwhile, spread your money across a range of different investments such as shares, bonds, property and cash.
Another option to consider is a financial adviser, who will choose investments on your behalf. When choosing an expert, a good starting point is the website of the Personal Investment Management and Financial Advice Association (PIMFA) – the UK trade association for firms that provide investment management and financial advice.
Where to buy investments
Once you’ve looked at the choices in the market and you’re ready to buy, different investments can be purchased through a number of channels. Our handy table shows you how:
|Investment type||Where to buy|
|Savings account||Bank or building society|
|Stocks and shares||Online stockbroking service|
|Via a financial adviser|
|Bank or building society|
|Private client stockbroker|
|Funds i.e. unit trusts or OEICs||Online stockbroking service|
|Via a financial adviser|
|Online fund supermarket|
|Directly from a fund manager|
Although you might have a lump sum ready to invest, many brokerage firms, banks and building societies allow investors to invest in shares and funds through regular saving – where you invest smaller amounts on a monthly basis.
As well as being more affordable, regular investing can reduce the risk that your investments lose value because it evens out fluctuations in the stock market. You can read more about this here.
You can make regular investments (in addition to lump sum payments) into stocks and shares ISAs which allow you to save without paying tax on the interest you earn. You can open up an ISA through your broker or bank.
Did you know?
Investing on a regular basis each month, instead of as one lump sum, can help to reduce the impact of stock market fluctuations on your portfolio.
What else should I consider? Online share dealing platforms are becoming increasingly popular.
Many banks and stockbrokers offer this service. Costs are generally lower and online platforms allow investors to view and control their investments in one place, making it easier to keep track of your overall portfolio.
Any information provided should not be considered personal advice. Past performance is not a guide to future performance. You may not get back the full amount you invest. If you have any doubts about making your own investment decisions, seek financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future. The information given is not intended to provide legal, tax or financial advice.