Overview

March 2009 saw many Stock Market commentators advising against making share investments. Now, 13 months later, is the Stock Market becoming a more viable proposition for the average investor to buy online stocks? November 2009 saw the FTSE 100 index trading in the region of 5,380 during the third week of that month, having risen by a full 50%. So, is this the sign of recovery or is such optimism misplaced? Well, according to today’s Daily Telegraph, FTSE 100 index is currently trading at 5,739, down by 1% on previous figures. Clearly, this is just one snapshot and figures on the Stock Market are quite fluid. However, there does appear to be a cautious recovery At present BP is yielding 6% and word has it that some of the big drug companies are an excellent choice.

Purchasing Shares Online buy online votes

So, how do you start to buy online stocks? Is this something the average individual online user can do without getting bogged down with all sorts of red tape? One thing you do need to be aware of if you are just starting out is to factor in the cost of dealing because this will certainly make investment returns much less attractive. One way to get round this is to make use of the expertise of execution-only stockbrokers who will buy or sell for you but will not get involved in providing you with advice. This is certainly one way to save some money and should be considered in the decision to buy online stocks.

You are sure to get to hear about nominal shares which are virtual shares by any other name. The shares are electronically held by a nominee broker, with them technically owning the shares on your behalf. This does not remove your beneficial rights, however: any losses or gains still belong to you. There is always a downside, and this is no exception. By becoming a beneficial owner of electronic shares you are not automatically eligible to shareholder voting rights, or to some of the discounts made available to owners of shares.

Costs and Charges

First and foremost you will be expected to pay an annual subscription fee to the company that is holding your nominal shares for you. You do need to check with them if you are being charged per share or per account before shopping around for the most cost-effective holding company. Secondly, you will be charged a commission when shares you own change hands or when you wish to purchase more shares.

Invariably, it always used to be a percentage calculated on how much you had paid for the share. Nowadays there are more and more brokers who prefer to charge clients a fixed amount, or flat fee rate, based on a single transaction despite the size of the share being bought. Either way, do your homework before you start to buy online stocks and learn as much as you can about trading on the Stock Market before you get into something that really needs to be understood for you to get the most benefit from it.