What Is The Best Way To Invest in Stocks and Shares?

Building Out
7 min readJun 14, 2022

Photo by Yiorgos Ntrahas / Unsplash

So you have read my previous blog post on why you bother to invest your money. If you have not read it, follow the link below:

So you now want to invest your money, but the next question is in what? There are multiple options, property, commodities (such as gold, oil etc.), bonds, stocks and shares. Even the newer digital assets such as online business, e-commerce and NFTs are potential options.

I will do future blogs on each asset class, but today I want to concentrate on stocks and shares. They are an easy way to invest money in pensions, ISAs and children’s ISAs, but where should you start?

There are several ways to invest in stocks and shares.

Firstly buying individual stocks. Buying single stocks has the potential for very large gains but is a potentially more risky option. If you can read companies’ financial statements, their track record, the nature of their business, and the environment they operate in, then there is potential to make a lot of money with this approach. Some advocates of this method, such as Warren Buffet, suggest picking undervalued stocks and holding on to them for a very long time. This approach does require financial education and is not for most average investors.

Secondly, buying a fund managed by a fund manager. Within the fund, these can be actively managed, with the fund manager making decisions about what and when to buy and sell within the fund. They will often make the case that they outperform the market and, therefore, are worth paying the fees. But, again, you are effectively outsourcing the leg work to a fund manager and expect to pay higher fees (sometimes much higher).

The third option is buying a fund which is a specific type of investment in all of the stock markets within a certain index (e.g. FTSE 100, S and P 500). These produce a very diversified portfolio, and as no one is actively managing them, they reflect exactly the ups and downs of…

Building Out

Doctor. Ex-financial adviser. Property. Helping people to build wealth and time freedom with topics in finance, business and productivity. Education NOT Advice