Does the thought of how to buy shares scare you? The unknown. What’s involved?
Don’t worry, these days it’s really simple. A first time purchase can be completed online in just a matter of minutes.
Since writing this post, a new platform, Trading 212 has come to my intention which is potentially ideal for beginners because it lets you buy a minimum of 2 shares with no fees for dealing or inactivity fees for long term holdings.
Below I show beginners step by step just how easy it is how to buy shares for the first time. Illustrated with real transaction screenshots. When you are ready to buy your own shares in an individual company, via whatever dealing platform you end up using, it will, therefore, feel more familiar.
The particular illustrated share purchase below was made via an iWeb Stocks and Shares ISA account.
Step One: How To Buy Shares: Load Up The Dealing Screen
Before buying any shares, you will have first have to fund your account. This is easily done by debit or bank transfer.
Once you are logged into your Share Dealing or Stocks and Shares ISA Account, look for something like a “Deal Now” or “Dealing” link to take you to the screen to buy some shares in a company.
You will be presented with the Dealing Screen, see screenshot below.
Firstly, you can see 3 tabs. It is currently on the blue UK tab, this will be for UK listed companies and is the one we need. The other 2 tabs would be for International stocks various Investment Funds.
Next, you have the choice as to whether you are buying or selling. As you can see the circle for “Buy” is filled in, so it’s in the right place to proceed.
Where you see “e.g. Lloyds” etc, these are just your cues as to the areas of the dealing screen you will need to fill in.
By pure coincidence, as you’ll see, it is, in fact, Lloyds shares I will be purchasing today.
Step Two: Enter The Company Name or Ticker Symbol For The Stock You’d Like To Buy
Next, you need to enter the company you wish to purchase shares in. For this, you have 2 options. You can “enter the company name” or the “company code”.
I recommend inputting the company code, because if you input the company name, you may be presented with a confusing list of very similar looking options.
As you can see below all the options say “Lloyds Bank” but none of them is the one we need.
What it is best to do is enter the “Company Code”, otherwise known as “Ticker Symbol”. If you know the ticker symbol for the company you want to buy shares in, this will ensure you are purchasing the correct shares.
The easiest way to find ticker symbol is to find the share price online and the company ticker code will be referenced. You might see it as LON:LLOY or (LLOY) etc. Quite often investment articles include the ticker symbol when referencing a company.
So to save this long list causing any confusion, just enter the company code and click Verify.
In this case, the company code is LLOY, so that is what entered. Once I clicked Verify, you can see the yellow rectangular table appear. This confirms the current share price (71.31p to 71.32p), the currency in GB Pounds (GBX) and the market, the London Stock Exchange (LSE).
Shares prices are constantly moving. Usually not enough to make a difference a to whether you purchase or not, but something to be aware of. For some stocks, the price will be fluctuating every few seconds TO refresh the current price click the blue square with the white circular arrow in it and it will update the date in the yellow table.
Step 3: Enter How Many Or Total Value In Shares You Wish To Purchase
Next, you have to decide how many shares you want to purchase. You have 2 options.
Firstly, you can choose to buy a specific number of shares. So for example, I could opt to buy 2800 shares, in the example below at an expected share price of 71.34p
So no matter what the price movements are, I would be opting to buy exactly 2800 shares at whatever dealing price is offered at the exact time of the trade.
Stamp duty and dealing fees are added on top.
So the overall transaction would be expected to look like:
2800 shares x 0.7134p = £1997.52
Stamp Duty: (0.005%) = £9.99
Dealing Fee: =£5.00
Total Cost: = £2012.51
Alternatively, the second option, you could opt to invest in “Value”. With this option, you input the maximum amount you would like to invest and it will result in you buying the maximum number of shares, including stamp duty and fees up to the amount you input. As you can see below, I put a “Value” of £2000.
Step 4: Confirming Your Share Purchase
Whichever option you choose above, whether to purchase shares by number or by total value, you then click “Continue”.
The following “Confirm Your Order” screen would countdown for 15 seconds. In which time, to complete the deal at the offered share price you need to click “Deal Now” to actually complete the purchase.
Now, being your very first purchase, and quite possibly for a fair size of money, it can feel a bit of a moment. Don’t worry, you have the option to “Cancel”. Or if you don’t anything in the 15 seconds the Deal offer will close and you will have to refresh the share prices and “Continue” again.
However, if the share price is pretty much as you expected, just click “Deal Now”.
In the above example, I actually inputted £2069.01 as the “Value” of funds I wanted to purchase in shares. Just because it was the exact amount of funds available in the account. As you can see, the deal went up to a total value of £2068.74, buying me 2881 shares in Lloyds.
Personally, I like to make use of every penny and put as much as possible working to the max earning me more dividends. I don’t need round number share totals etc.
Step 5: You Are Now A Shareholder!
Once you have clicked the “Deal Now” button, the transaction will complete and you will become the proud owner of your very first shares in a UK-listed company.
Once you have reached this stage you are now the proud owner of a share of a company. If the company pays out a dividend you will be receiving those.
As it happens, when I refreshed the above deal and completed it the second time around, it offered an even cheaper share price.
Hopefully, the above steps combined with real screenshots show how easy the actual transaction process of buying shares really is. It is exactly the same process whether you buy them in a normal share dealing account or Stocks and Share ISA. Easy.
I primarily buy shares for income, in the form of dividends. Over the coming weeks, I will explain more about how I choose my dividend paying shares.
Any questions, please ask! 🙂