Shares

The current economic turmoil on the markets and the weakness of the economy in Ireland had led to great uncertainty. With low interest rates on deposits from banks and an increased nervousness about holding deposits in Irish banks, speculating in shares which are historically low has become a consideration for even the small time player who has money on deposit.
This, along with recent events on the stock market may have led you to think about investing in shares for the first time. Buying a share in a company means you own a small part of that company. But shares are risky investments and their value can move up or down, depending on the performance of the stock market and the profitability of the individual company now and in the future.

You need to consider your attitude to risk before you buy shares.
When you buy shares, the aim is to invest in shares that will grow in value over time, meaning (in theory) that you can sell them at a higher price later on. However, there are no guarantees that shares in a particular company will rise in value, so you may need to take a long-term view.

The golden rule is not to invest money that you cannot afford to lose – if you want some level of guarantee, then the stock market may not be for you and you may want to consider other investment options.

There are ways you can manage the risk such as spreading your investments across regions or a mix of assets such as shares, property bonds or cash. You can also manage risk by investing in exchange traded funds (ETFs). These funds track the shares of a particular index, such as the ISEQ and management fees on ETFs are typically lower than other types of investments.

You can also invest in the stock market through pooled investments where some of your money is invested in shares. Some examples of pooled investments are unit linked funds, with-profit funds and tracker bonds. But make sure you check the charges that apply.

Seek the best advice when buying large amounts of shares. Research is key to this. Cheap advice, or following your own instincts can be an expensive folly.
You have to pay administrative costs when you buy shares and pay taxes on your profits and dividends when you sell up, so you may want to get professional advice to help you decide what option is most suitable for you.

Only a stockbroker can buy or sell shares on the stock market. You can buy and sell shares by going directly to a stockbroker, to your local bank, through an investment broker, or with online share dealing. Some banks also operate online share dealing services.

Regardless of who you approach, a stockbroker will still be used to perform the deal. Always make sure your provider is regulated before you invest. See our authorized intermediaries section.
A stockbroker may offer three types of account:

* Discretionary: the stockbroker makes investment decisions on your behalf, within agreed guidelines;
* Advisory: the stockbroker advises you on what shares to buy or sell; or
* Execution only: the stockbroker buys or sells shares that you have chosen yourself without offering any advice.

When you use a stockbroker, you will pay charges – both fees and commission.

The level of fees you pay depends on the type of service, or account you use. There will usually be an annual account maintenance charge. In addition, the stockbroker will earn commission for buying and selling shares, charged as a percentage of the value of the shares.

Charges will vary between different stockbrokers, so if you are planning to buy shares for the first time, find out what the levels of charges are and ask for a full list of all charges. Your stockbroker is obliged to give you this information if you request it.

There are a number of ways you can hold shares. Decide what is best for you before approaching a stockbroker. See our separate section.