9 Jun 2026

A Beginners Guide to the Stock Market

No doubt you’d have heard of the roller coaster start to the year that the stock market has endured. Stocks have seen billions wiped of their value, and many investors are looking to pull out at the best opportunity. Despite this, many adults find themselves flummoxed as to what the stock market is really all about. Share dealing worries many people because of the apparent risk, while many people don’t understand the full reasons why the prices fluctuate, or even how to set up a share dealing account. Here’s a quick guide to get you started.

Getting Started

If you’re looking to build your own portfolio, then many banks offer share dealing services that link directly to current accounts. After you’ve had your application accepted, you’ll be able to invest (so long as you have them money required in your current account) in any company that’s listed on an exchange.
You’ve got to be careful though. Investing in the stock market should only be undertaken after a substantial amount of research, and be aware that unless you’re a financial expert, you’ll probably stand to make a few mistakes. Take time to read the long term plans of companies before you put your cash into them.

Remember – it’s for the long term

If you’re concerned about risk to your money, and you don’t want to live your life on a knife edge with the worry of stock market falls on the back of your mind, then don’t invest for the short term. Long term investments take a while to mature, but the returns on them are almost always better than cash. It’s common knowledge that the stock market only beats cash investments 50% of the time if only invested in over one year, but over five years stocks win 80% of the time and over 20 years it’s as much as 98% of the time. Trading day to day isn’t really investing – it’s more speculating or gambling, and when you’re paying your dealer around £10 to make a trade along with stamp duty it’s actually very hard to make a profit. The people most likely to make money out of such a practice are your dealer (bank) or the government.

How to create a bigger safety net

Investing in safer blue chip companies, such as those listed on the FTSE 100, comes as highly recommended for inexperienced investors, as they are easy to track through sites like BBC Business. That said you’ve also got to diversify your portfolio in order to avoid the worst of volatility. Investing in just one company will put a real squeeze on things if bad things happen in their sector, such as commodities, finance or construction. Instead, if you spread your investments across a range of companies and industries, you’ll be less vulnerable to volatility. You could invest in the stocks and shares part of an ISA, which most often allow you to put money into share indexes such as the FTSE 100. These are often good options for investors who want to put away a small amount a year.

When you begin stock market trading it’s a good idea to set aside a specific amount of funds with which to trade with. This way you won’t find yourself losing more than you can afford. If you’re looking to open a bank account then make sure it’s with a financially sound institution, such as Alliance and Leicester.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £399