Should I invest in shares or funds?
Find out how to get more bang for your buck and minimise the risks
If you buy shares in a company you’re buying a slice of that company. It’s likely to be a very small slice, but it means that you may receive a regular share of its profits.
This profit share is called a dividend and in addition to the potential for regular income in the form of dividends, the value of the shares may rise if the company performs well. If you pick the right company (or if you’re lucky), you could do very well.
Not all companies perform so well, however, and even well-known household names can have a bumpy ride. The risk is that you invest in a company that doesn’t do well or whose shares fall in value when you need to cash your investment in. Which is bad news if you’ve invested a large chunk of your retirement savings, for example.
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.