How to work the stock market like Gordon Gekko

Make like the Wall Street top dog with our handy guide

Gordon Gekko

23 January 2020

So, you want to invest in the stock market…

Hurling savings into the stock market (which is just the name for the place where you can buy a share in listed companies and hope to turn a profit) looks tempting. And it can be lucrative: since 1899 UK stocks returned 4.9 per cent a year in real terms, compared with 0.7 per cent for cash.

Kerching. Where do I sign up?

Before emptying your bank account, remember: stock market investing is gambling dressed up with suits and a whole lot of jargon. Shares can go up, down or be wiped out entirely on the basis of the flimsiest of reasons (or for no reason at all). Only invest what you can afford to lose.

Is it hard?

Fund managers want you to think it is. But if you’re prepared to do your research, spread your cash to minimise risks and drip feed it into any investments, you could do well.

The main stock market is the London Stock Exchange, which is then sliced into lists, such as the FTSE 100, which comprises the biggest 100 listed companies.

How do I get my hands on shares?

You can go direct, and buy shares in a single company, via online platforms like Hargreaves Lansdown or The Share Centre. Compare the costs, and be aware that buying and selling like you might do your Asos purchases will quickly rack up pricey fees and erode any returns.

What else should I know?

Boost your gains with a stocks and shares ISA, as you can save up to £20,000 each year, tax-free. Do lots of research online (obviously starting with the Evening Standard’s unbeatable City pages). Never chuck all your cash into a single investment — the risks are too great.

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How to work the stock market like Gordon Gekko

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