The stock market is a good place to invest.

Why invest in shares?

Investing in the stock market is an option that you could consider if you have some money to spare.

Investing in the stock market is riskier than saving in a bank or building society account.

You can get back at least the money you put in with a bank or building society account. If the bank or building society goes out of business, you will get back all the money you put in, up to a maximum limit.

It is possible to make money and lose money with stock market investments.

If you are willing to invest for at least five years, then investing in the stock market is worth considering. The longer you invest, the more likely you are to make money.

If you had saved your money in a bank or building society account, you wouldn’t be able to get at your money as easily if you invested in stocks and shares. If you need to in an emergency, you need to think about whether you can get money in other ways.

To learn more about saving for emergencies, see Why do I need to save?

What is the best way to save money?

What are the differences between stocks and shares?

The stock market is where stocks and shares are bought and sold. This is also referred to as trading.

The top performing companies in the UK are listed in the FTSE 100.

The company takes your money and invests it. You both make money if the company does well. This is a return. You risk losing money if the company does badly. The value of your shares can be affected by world events.

It is possible to lose money if you invest in stocks and shares. The value of shares can go up quickly too. If you invest for a long time, you are more likely to earn more money than if you saved with a bank or building society. It’s called giving you a higher return.

There are ways to invest in the stock market.

There are many ways to invest in the stock market. Buying and selling shares directly is the most risky way to do it. You may lose a lot of money if the company you choose does poorly.

Put your money into a pooled investment fund to reduce the risk. If one of them does badly, you can spread your money between safer investments to make sure you don’t lose money.

Government-backed investments called gilts, cash, property and bonds are some of the safer investments.

Gilts and bonds are loans of money. You have more guarantees that you will get your money back, which makes them safer than shares. You will be paid interest as well.