The stock market is not the first place for your spare money. Before even considering buying shares, you should make sure that you've taken care of:
If you've still got something over, the stock market might be the place for it. But not necessarily. Interest-bearing accounts with a bank or building society, National Savings, gilts, property, or even collectibles like art or antiques, may be more suitable.
The point is that different investments have different risks and rewards. The key differences are:
In general, the stock market is a good place to put your money if you are prepared to accept the possibility (however slim) that you might lose the lot, and if you are happy to leave it there for at least four years. It is not a good place to put money that you cannot afford to lose, or money that you might need at short notice.
Why is that?
Because the prices of shares go up and down, and ideally you want to be able to choose the moment when you sell your shares. If you become a forced seller of shares because you need the cash in a hurry, you deny yourself that choice. The stock market may be at a low, and you will have to sell at that price.
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