How To Invest In Stocks & Shares

From Alibaba to Amazon, let’s explore how to invest.

Updated: May 18, 2024
Matt Crabtree

Written By

Matt Crabtree

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Apple stock’s (NASDAQ: AAPL) market cap is equivalent to Britain’s GDP.

Although it's very difficult to say what’s going to happen in the next five months, let alone the next five years — due to the enormous volatility currently happening in the markets — making an investment in huge firms like Ali Baba, Apple or Amazon offers you a tiny slice of their enormous capital. 

You also gain a slice of ownership in the firm itself. Overall, you are making a stake as to whether the company will grow in value with time.

People often choose the largest stocks because they have more momentum behind them to continually harvest profits and offer shareholders some of that gain even if the market is in a depression.

In this guide, we’ll cover how to invest in stocks & shares!

At a Glance, pros and cons

So, you’re considering investing in stocks. Remember that there is no substitute for living with a big picture — a strong purpose. With a clear purpose, you are likelier to do the right things without even trying; one example is somebody who has a baby…

Usually, they will find they have more ambition, more focus and more clarity on what is important in life. So always ask yourself what is important and why you are aiming for it.

With that said, if you want a clear-cut overview of the drawbacks and advantages of stock trading, check out this mini-section — I made it just for you.


Diversify your portfolio. Cash is highly unstable in places where it used to be very stable. For instance, the ruble is reaching parity with the dollar. Meanwhile, the British Pound Sterling is weakening. Stocks offer an opportunity to diversify your capital.

Stock trading apps are quite simple. You will find that most stock trading apps give beginners a relatively easy way to place orders.

Possibility of using ETFs. The stock market can be an immensely confusing environment, due to all of the options. ETFs are bundles of stocks that you can use to quickly gain a diverse collection of shares.

Use only for extra cash. Rather than investing your life savings, you can invest extra money that you don’t mind losing, with the possibility of locking in its value or even getting interest. And if you are patient,  you can build into quite a bit of savings long-term.


❌️ Volatility in financial markets. As mentioned, the British pound sterling is decreasing in power. And there are a lot more crazy things happening: inflation is rising and there is general uncertainty in economies globally; stock trading apps have to navigate this. So make sure not to put your faith in learning how to trade stocks.

❌️ There are more practical investments. There’s a strong argument that it’s a much better investment to buy land and turn it into a farm where you can grow food and raise animals that you can eat to support yourself and your family. (Warren Buffett says he prefers investing in farmland much more than he does Bitcoin).

How to invest in stocks & shares, the basics

  • Trading in stocks is generally a long-term investment
  • Structuring apps will often ask you how much risk you are willing to take on. The more the risk, the more aggressively the app will invest your money in the markets. 
  • You can make money if shares in the stock you have bought increase in price enough that covers all of the expenses and more. This means that you can sell. For more than you paid and pocket the profit. 
  • You can also lose money if your stock falls in price. Long-term, a single stock can fall and rise in price multiple times — but long investors are looking for a long-term trend. Day traders however make a living by making small wins across the day.
  • Profitable stocks can also offer honours dividends on a regular basis. 

Let’s go through this in more detail.

Shares are handled differently according to the trader. Some traders will handle them as a short-term investment strategy. They are called day traders. However, even day traders only make substantial gains over the long term. There are also private investors who use stocks as a way of saving for retirement. 

It’s only possible to invest in shares for firms that have “gone public”. This means that they are now tradable on the open market. Firms get into the stock market as a way of raising capital for their daily operations, or in order to find an expansion. Once they are listed, the company’s ‘stocks’ become tradable. 

Market capitalisation

The full market value or capitalisation of a company is measured by the total value of its stocks. For instance, Apple has a market capitalisation of trillions of dollars. Of course, no single investor could afford that much to invest. Instead, traders purchase only pieces of that capitalisation. We call these pieces ‘shares’ and having shares makes you a shareholder. 

This essentially means you’re able to invest in Apple and its future market capitalisation — by purchasing shares in Apple, you are hoping it will continue to perform well and develop more in value over time. Some result of this will mean that you can sell off your Apple shares for more money than you actually paid — meaning that you earn a profit.

Once again, when learning how to invest in shares, you need to consider that the stock market is a long game. This is the case even for day traders, who were experts at making split-second profits throughout the day.

It’s generally considered risky to focus your portfolio on any single stock, even in the case there is a blue chip company — blue-chip corporations have such massive market capitalizations that they tend to perform stably even when the market flounders.

Today, we face immeasurable instabilities internationally, including effects of the Russian-Ukrainian conflict, tensions between Northern America and China, inflation in Britain, lingering effects of COVID-19, and more. These are all incentivising people to do more market sell-offs. 

Expert financial advisers like Warren Buffett and Ray Dalio will probably advise that investors take dispassionate stances, holding onto the right kind of stock even as the world is in turmoil. For instance, Ray Dalio increased his number of investments in key Chinese companies despite the contrary having regulatory issues in 2020. 

How to invest in shares sensibly

Vanguard is probably one of the more successful companies for investing in stocks on the behalf of its clients. They also people from low-income environments.

So if you want to invest in a team of professionals who understand the markets better than most people, this is probably one of your strongest options.

Remember not to invest what you can’t afford to lose. Also remember that there were many practical ways to invest your money, such as buying a power generator, storing extra food and water supplies, and growing a homestead you could raise a family in.

Also, keep in mind that experts like Warren Buffett have spent hundreds of thousands of hours mastering financial data. Making astute decisions about stocks requires lots of experience — or the assistance of experts.  

Different types of stock investors

Let’s break down the different personalities who are attracted to stockbroking. This can give you some great perspective on learning how to invest in shares.

Start out with one of the best-known examples. Warren Buffett is a long-term stock trader. He likes to look at the markets from a distance rather than being immersed in the day-to-day fluctuations or even weekly fluctuations. These kinds of investors seek to understand the financial principles of how economic markets work.

Such investors study the big-picture moves happening behind the scenes — affected by events, politics and financial fundamentals as well as business principles. 

This is the exact opposite of day traders. Day traders run on adrenaline — they are making numerous decisions throughout a single day. This is a very active approach to trading.

Nevertheless, they are very focused on technical indicators, the various rhythms of the markets as well as pattern recognition happening on the exchange. This is why this kind of trading is typically viewed as the most intense and high-stress, for example, in images seen in depictions like the “Wolf of Wall Street”.

You might be the most interested in the third kind of investor. This is the retail (nonprofessional) person who once you use stock markets as a potential retirement or early retirement plan.

Because they are not professionals, they will typically depend on our company, such as Hargreaves Lansdowne, or a team of professionals to manage their investment pool. In the section above, I gave Vanguard as an example as well. Some students also use stocks and shares ISAs

To find out what kind of investor you are, ask yourself these three questions relate to you:

☑️  “I want to be in control of the stocks and shares I choose.”

If you want to take a hands-on approach, then you’re probably looking to become a professional investor. This means you will become a day trader or someone who handles the fundamentals for long-term investment. Keep in mind that this takes many many years of experience developing a working strategy. 

So overall, active stock investments needed as your central source of support should only be attempted if you are actually a professional who has spent years learning how to invest in shares and has maybe become accredited as well (not all do though). With all of these years of experience, you will gain subconscious instincts about how the stock market function.

This will allow you to make accurate decisions after going through things such as reviewing technical indicators or the financials of a business. 

If you are not professional, this kind of financial data will look like complete jargon.

☑️ “I want somebody to manage my investments”. 

For this, you will simply need to find a financial adviser who you trust your savings with. Once again, I gave Vanguard as an example. But many others exist. A few people also rely on robo-advisors. But generally, this is only used by professionals as an extra way of hedging and gaining insights. That method has a very low level of trust. 

☑️ “I want to diversify my capital because my cash is weakening.”

Once again, consider what other investments you have: investing in communities, social bonds, finding out your local food supplier, developing your own family, moving to a more affordable country like Thailand or the Philippines and increasing your employability by learning new skills.

There are many different ways to invest. But another way is to use mutual funds or index funds as a relatively secure way of learning how to invest in shares. Indeed, this is the primary method that Vanguard uses to get stable returns year after year.

However, there is no guarantee that this kind of thing will continue to happen. So investing in practical things like a backup power generator can be more useful than stocks. The trick is probably to invest proportionately.

How to invest in shares, the best app

Once again, the app you use or the specific stocks you invest in does not matter nearly as much as the big picture plan you have for your life. When you have a clear purpose, everything you do naturally will be aligned with that purpose. It’s important to have a big enough purpose that they can inform all of your lower decisions and motivate you to make the proper sacrifices.

That being said, there are many different brokerage services that offer customisable options for beginners. So when you are discovering how to invest in shares, you might find it useful to use discount brokers with 0% commission as a way of hedging a bit of your capital into high-performing stocks — perhaps something in the emerging markets or those related to important commodities. 

There is an interesting platform for beginners who want to directly have ways of exploring how to invest in shares and explore the world of money today. Unlike Vanguard, you will directly manage your capital — this comes with potentially higher risks but also more ability to take aggressive gambits.

eToro — Top, direct how to invest in shares option

So you’ve decided to take on all the risk yourself? Or, do you want the ability to copy a trader on the eToro CopyTrading platform?

In that event, eToro attracted a phenomenal amount of attention through its various sponsorship and advertising campaigns. So you’ve probably heard of this way of investing in stocks. 

Your capital is at risk. Other fees apply. For more information, visit Copy Trading does not amount to investment advice. The value of your investments may go up or down.

One of the most well-known reasons people use this platform is because it focuses on social trading. It takes a stance that there is such a thing as crowd wisdom. That this can be applied to making better trading decisions over the long term.

They have a bustling community of millions of users who share knowledge. There is also the ability to copy specific high-performing traders on the network. So this potentially offers a passive way of investing in stocks independently.

Another attractive feature of the eToro platform is that it potentially reduces the risk of bad actors by making it harder for suspicious accounts to exist.

This happens because each user is required to verify themselves through what is called Know Your Customer (KYC). only after this happens that users can start to do actual trades from their accounts, and is possibly also needed before they can participate in communities and get deeper access. 

They also use two-factor authentication: which also boosts the security of the platform. Together with the usage of minimum account deposits, eToro makes it harder for bots to function on its app. So this may be a slightly more persuasive option to robo-advisors because you get to copy a real trader. 

Finally, eToro has a large number of connections to the global marketplaces. They offer access to the users to more than 2,500 stocks. And trades have no commissions. That makes this app a low barrier to entry for beginners and retail investors who do not have a big portfolio.


✔️ Beginner-friendly

✔️ Copy trading

✔️ 0% Commission on stocks

✔️ Regulated 

✔️ Learning portal


❌ Volatile markets today

Robo-advisors 🦾

Let’s share a few words on a technology you may have heard about when investigating how to invest in shares. Robo-advisors grew after the 2008 financial collapse. Developed by Jon Stein and Eli Broverman, this piece of technology aimed to reduce fees for investors by offering useful indicators for informed trading decisions. 

Since the first offering came to the market, other companies started providing the same service. Even some of the most established online brokerage, for instance, Charles Schwab began offering their own version. A survey released by Charles Schwab found that 58% of its users surveyed wanted to use robo-advisors at some point. 

There is something to be said about the progress of artificial intelligence. AI is steadily becoming more capable and insightful. However, a financial arms race of robots does seem to defeat the point of trading altogether. There is a hard limit to the power of algorithmic decisions. It may be powerful for mitigating tax losses but not a primary way of building wealth.

Costs and investment routes

Many workplaces offer investment plans for retirement. Your pensions package may allow you to invest a small portion of your salary, taking out as a cut of your regular earnings. Your money is pooled into investment services like mutual funds, and it may include your own company’s shares.

How about fees?

The key to economics is that there is no such thing as a free lunch. You see plenty of services advertising themselves as 0% commission. Nevertheless, somewhere along the way, the user needs to pay fees so that the platform can take its cut.

In this way, most financial providers have a minimum deposit policy. You can’t open your account until a specific amount of cash has been deposited. This will even be as high as £1,000. 

Please note: it’s hard to make any substantial ROI without a decent starting capital. When learning how to invest in stocks, you need to balance having enough cash to invest with not over-investing your savings.

It’s up to you to select the ideal service with a good track record for annual returns, balance against minimum deposits and other costs. Oftentimes, the broker makes its commission as a cut per transaction if not some other way.

The ideal fee structure for you

The best-suited fee policy for you will depend on your kind of investment. For example some traders one out multiple transactions in a single day. These day traders typically, therefore, may prefer platforms that have the best fees for high-frequency trading.

Every cent and pound affects how much the level of profitability. Warren Buffett himself says that limiting expenses is the backbone of sensible trading — as it stacks up. 

The total number of trades is calculated in the following way: shares in one company are separate from shares in another, the type of trade is also specific (spread betting counts as different to traditional investment in the stock market), and it matters whether you are opening the trade or closing it (each counts as a separate trade). 

For example, buying a single share each for five different companies will add up to five separate trades, each covering a charge. This is doubled once you close it. And that’s not to mention platform fees. 

How to invest in shares: The Verdict 

While there is no free lunch in economics, the closest thing to this is diversification.

Diversification is a fancy word for not having all of your eggs in one basket. It’s useful in times when eggs are exploding all around the place, and it’s not sure which ones are the most stable. We currently live in those times and so is understandable that you may want to learn how to invest in shares and perhaps become part of a mutual fund.

If you are uncertain and unsure about where to go next, you’re not alone. Always remember this. Make an effort to build real connections in your community. When times become difficult, the genuine and trusted social connections you’ve formed can turn out to be more valuable than any investment in a company.

Related Guides:


How do mutual fund fees compare to stock trading fees?

Can I trade stock on a phone?

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