LecturerGood afternoon. Today I want to demystify investing in shares, because for most people it is far simpler, and far less frightening, than the headlines suggest.
LecturerLet's start with the basics. A share is simply a small piece of ownership in a company. Buy one, and you literally own a tiny slice of that business and its future.
LecturerThere are two ways a share can make you money. First, its price can rise over time — that is called capital growth. Second, many firms share out part of their yearly profits, and these payments are known as dividends.
LecturerNow to the most important lesson of all. The cardinal rule is never to put all your money into a single share. Spreading it across many different shares is what we call diversification.
LecturerThe whole set of investments you end up holding is referred to as your portfolio, and a healthy portfolio is always a varied one.
LecturerFor a beginner, the easiest route by far is an index fund. Rather than gambling on individual winners, an index fund quietly tracks an entire market, giving you instant variety at a very low cost.
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