Buying shares, good way to earn or too risky?

True_Blue_3

I was just wondering what peoples experiences are. I was considering investing in shares, probably a few hundred at a time with a view to increasing in value within the next year or so. I know risks can be enormous though if you dont invest wisely. What are peoples views?

Also the income tax you have to pay on them would surely mean making any real profits is quite tricky unless you invest significantly.

googler

There's no guarantee they'll increase in value, though... which is where the risk comes in.

For example, companies like BT and Rolls-Royce are good for a reliable dividend every year, so provide a modest return on investment.

Riskier, volatile stocks could include something like Caza - an oil exploration company. Leapt up 21% today, which on the face of it was great, , but current price is 12.90, they were at around 48.00 - 50.00 a year or so ago. If you'd bought yesterday, your £1000 investment would be worth £1210, but if you'd held long-term, £5000 invested then would be worth £1290 now...

droopsnoot

Have a look in the 'Savings and Investments' board on here for more detailed discussion - there are lots of threads on there started by people in a similar place, also check the 'Monevator' web site.

You can use your S&S ISA allowance to buy into shares, funds, and the like which will remove the tax issue. If you want to buy actual shares in companies, you need to do some good research, investing in a fund (made up of shares in many different companies) might be an easier way.