How to invest in stocks

A beginner’s guide to how to invest in the stocks market to help you get to grips with the basics of buying and selling shares.
Learn to invest wisely and you can get great returns over the long run.

How to invest in stocks - a beginner's guide

Investing is a bit like going to the gym — it’s something we know is likely to be good for us but we don’t do it as often as we should.

One of the problems with overcoming this is that, from the outside, investing can seem confusing. 

There are lots of numbers, acronyms and pieces of lingo that can make things overwhelming for anyone trying to figure out how to invest in stocks.

Mike knows

But investing in stocks — or any similar assets — doesn’t need to be tricky. 

If you read through this guide, you’ll be able to learn the basics about why you should invest, how you do it and what you can buy. It’s like the Freetrade version of stock investing for dummies (only for smart people).

So if you’ve been trying to figure out how to invest in stocks from the UK, read on and we’ll reveal all.

Why should you invest?

Looking back over the last few decades, investing in stocks has been one of the best ways to beat inflation. 
Over time, the value of money changes and the cost of a good (milk, beer) or service (a haircut) that you can buy will increase or, in some cases, decrease.

Average annual rate of inflation calculated based on the ONS’s annual figures.

Let’s say you set aside £10,000 in a bank account in 1989, earning 0 percent interest. 

The cash is safe and secure, but over time the amount that you can purchase with that money steadily decreases.

As of 2019, the value of that cash has decreased by over 50 per cent, meaning that you can only buy about half of the goods that you could have purchased back in 1989 with the same money.

Most savings accounts don’t pay 0 per cent interest. But some UK savings accounts still pay interest that is lower than the rate of inflation.

For example, the average return on a fixed rate cash ISA in 2019 was 1.28 per cent but the inflation rate was 1.79 per cent, meaning account holders actually lost money in real terms.

FTSE All-Share Total % Return vs UK inflation rate 2015-2019

Investing in a diversified portfolio of stocks has generally been a good way of countering this negative problem.

As you can see in the chart above, the FTSE All-Share index, which is made up of hundreds of UK stocks, generally increased in value more than the rate of inflation did over the five year period from 2015 to 2019.

Check out this ‘why invest’ piece we’ve written, if you want to dig deeper into some of the reasons to invest.


How to invest in stocks - a beginner's guide

If you trace your family tree back one generation, you’ll have two ancestors — your parents. Trace your family back 30 generations and you’ll find 1.73 billion ancestors. 

This is an extreme example, and one that’s very unlikely to happen if you invest, but it shows the power of compounding.

Compounding is one of the most powerful forces in investing.

It’s the process by which you make a return on any returns you’ve already made. 

So even if the percentage at which your investments grow remains constant, the value by which they grow will increase over time. 

We can see this in our family tree. Each generation we go back will double the number of ancestors you had in the prior generation. 

That means the rate at which your number of ancestors increases remains the same. But because of compounding, the actual number of ancestors that you have will grow more and more with each generation.

You can see this process in investing too.

Imagine a £10,000 investment increasing at a 5 per cent rate every year for 40 years. By the time those 40 years are up, that £10,000 would be worth £70,400.

Of course, you have to remember that stocks don’t always increase in value. 

That’s why it’s better to hold a portfolio for a longer period of time. Not only is it less likely to result in you losing money, it also means there’s a better chance you’ll see compound growth in your investments.

What are stocks?

Stocks represent ownership in a company. So when you invest in stocks, you are buying a small stake in a business.

This is why you’ll usually see the value of stocks fall or rise according to how well a business is doing. 

If a company is making much bigger profits than expected then its share price will likely rise. 
The reverse is also true. A company doing worse than expected is likely to see its share price fall.

You’ll often hear the phrases ‘stocks’ and ‘shares’ used interchangeably, something that can be confusing for investing newbies.

The only difference between the two is that ‘shares’ is generally used to refer to stocks in a single company. ‘Stocks’ is generally used to refer to stocks in more than one company.

How does the stock market work?

The stock market is where people go to buy and sell stocks. They generally do this on a stock exchange.

A stock exchange is an institution that connects buyers and sellers of stocks. 

In the past, people would have to physically go to an exchange in order to buy and sell stocks.

Technology has changed this entirely.

More and more of the mechanisms that let people find buyers or sellers and exchange their cash for stocks have been automated and digitised.

This means that a huge volume of trading now takes place electronically. A stock exchange will operate online systems that match buyers and sellers of stocks.

As a result, investors can now access exchanges online and use them to buy and sell stocks. This is generally done through brokers, that provide those investors with access to an exchange.

These technological developments have made it faster, simpler and cheaper to invest in stocks in the UK.

How does a company get listed on a stock exchange?

There are a couple of common ways that companies can list their shares on a stock exchange. 

The most talked about way is through an ‘Initial Public Offering’ or IPO for short. 

As the name suggests, this is a process by which a company sells a block of shares to public investors for the first time. That could include both companies and regular people.

An IPO is the most common way that a ‘private’ company ‘goes public’. But it’s not the only one. 

A very popular way to go public at the moment involves something called a special acquisition corporations (SPACs). After a SPAC begins trading, its board will identify a private company with which to merge. As a result of the merger, investors can then buy and sell shares in the company on a stock exchange.

Learn more:
What is a SPAC?

Why does a company’s share price fluctuate?

If you’re going to learn to invest, you’re going to have to learn to deal with market volatility and the rising and falling of share prices.

There are a huge range of reasons why this happens. Some are hard to pinpoint and tricky to predict, like the ones that might cause the tech bubble to burst

Still, there are some basic factors that you should be aware of before you invest.

Probably the most well understood ones are a company’s current performance and how people think it will perform in the future.

For example, a firm that is making solid profits and looks likely to continue doing so, is more likely to have a strong share price than one which is bleeding money and looks like it's about to go bankrupt.

Having said this, a company could be losing loads of money but, if investors believe it will be extremely profitable in the future, then its share price may still rise.

Another important factor to consider is any external or internal force that could harm the company or make it more successful. 

For example, if governments across the world decide to ban all flights, then shares in airline companies will be very likely to drop. Similarly, if a group of talented executives all leave a firm, that might spook investors and cause the company’s share price to fall.

On the other hand, if the UK government decided to give huge subsidies to green energy companies, that could make shares in a solar panel producer rise.

So how do you get started investing? Let’s take a look at some practicalities.

Open an investment account

How to invest in stocks - a beginner's guide

If you’re a first-time investor then you’re going to have to open an investment account of some description. 

An investment account will generally be with a stockbroker. A broker will connect you to the stock market, providing you with the means to invest in stocks.

Different brokers will provide different services and fees, so it’s important to look at those things and decide what’s right for you before you open an account. As a rule of thumb, the best investment app for you is likely to offer a balance between price and services.

Opening an investment account is simple but there are a few pieces of information that you’ll need:

Your name
Your age
Your address
Your nationality

You can find out more about opening an account with Freetrade on our help page, here.

Should you use a traditional broker?

Anyone looking at how to get into stock trading will be bombarded with ads for companies providing investment services. 

Some of these companies are older, traditional brokers. They may provide advisory services or let you open an account where you can choose your own investments.

These firms tend to charge higher fees for their services. Some people are happy to pay these fees because they feel more comfortable dealing with an established business.

In the past decade, however, several new firms have entered into the investment industry.

These tend to be tech-focused and operate online, whether via a browser or on a mobile app. 

The main advantage of using these companies is that they tend to charge lower fees for their services. They also generally provide a more up-to-date set of technology, which tech-savvy investors may prefer.

Probably the biggest development with regard to pricing has been the removal of commissions. This is a flat fee that brokers charge you for executing trades.

Some brokers will fund these lower costs by selling customers high-risk investment products, such as CFDs or options. Others will cover their costs by providing a subscription service or charging fees for foreign exchange transactions.

Ultimately, deciding between a traditional broker and a newer business will come down to your own needs and preferences. 

The best approach to take is to look at what services you need and how much you’re willing to pay for them. Based on that information you can make a decision as to which broker to use.

Learn more:
Saving vs investing
Should you use a robo-adviser?

General Investment Account or Stocks and shares ISA

Investors in the UK have two main options when it comes to opening an investment account.

The first is a general investment account — or GIA. As its name implies, this is a simple share dealing account that lets you deposit cash and invest. 

The other account on offer is a stocks and shares individual savings account (ISA). 

A stocks and shares ISA is a tax-efficient investment account that is available to people in the UK. 

The government allows people in the UK to deposit a certain amount of cash into a stocks and shares ISA each tax year. For the 2021/22 tax year, this amount is £20,000.

ISA account fee
Fractional shares
Spot rate + 0.45%
FX rate
ISA account fee
Fractional shares
Spot rate + 1%
FX rate
ISA account fee
Fractional shares
Spot rate + 1.5%
FX rate
ISA account fee
Fractional shares
Spot rate + 1%
FX rate

How to invest in stocks - a beginner's guide

ISA account prices at different brokers, along with the different fees charged

The main benefit of an ISA is that it allows you, with some exceptions, to make investments that won’t be subject to tax.

Because they have this benefit, a stocks and shares ISA will often cost more than a GIA.

But the tax benefits that you get from opening an ISA may not be necessary for you.

That’s because the UK government also gives people tax allowances for investments held in GIAs. For 2021/22, this is £12,300 in capital gains — the profits you make from buying and selling assets — and £2,000 for dividends, payments that some companies will make to their shareholders.

So for anyone looking at how to invest in stocks in the UK, the choice between opening a GIA and stocks and shares ISA will come down to whether or not you think you’ll exceed your tax allowances. 

If you think you will eventually exceed it, it may be worth opening a stocks and shares ISA. If you won’t, then it’s probably better to open a GIA. 

Having said this, you must remember that tax rules for ISAs can change and their benefits depend on your circumstances.

How to invest in stocks - a beginner's guide

How do you make money from stocks?

There are two ways that you can make money from stock investments.

The first is simple. You buy shares in a company, they increase in value and you sell them for a higher price.

The other way that you can make money from stocks is through dividends

These are payments that some companies will make to shareholders. Some investors choose to keep their dividends, others will use them to buy more shares.

Not all companies pay dividends and, even for those that do pay them, there’s no guarantee on the amount that you’ll receive.

It’s also the case that you aren’t guaranteed to make money when you invest in stocks. The value of your investments can fall and leave you with less than you started with.

How to invest in stocks - a beginner's guide

What returns to expect

People have a lot of stereotypes about the financial world and investing. 

Films like the Wolf of Wall Street can make it seem like the stock market is one big cash grab and that the goal is to make huge sums of money in as short a period of time as possible.

The reality is different. Firstly, you can lose money by investing in stocks, even if there are ways of reducing the likelihood that this will happen.

Moreover, investors should try to take advantage of smaller, compounding gains over a long period of time and not massive short-term gains.

Famous investor Warren Buffet, for example, has said that a return of 6 or 7 per cent per year is a good goal for investors.

(Data source: Macrotrends)

We can see this by looking at the performance of an index, like the FTSE 100 or the S&P 500.

The FTSE 100 is a collection of 100 of the largest companies in the UK that have shares trading on the London Stock Exchange.

From 2000 to the end of 2019, the total return on the index was approximately 77 per cent or approximately 3 per cent a year.

Over the same period of time, the S&P 500 increased in value by 120 per cent or 6 per cent on a yearly basis.

What to consider before you start investing

“How do I even begin to invest in the stock market?” is something that many first-time investors will often ask – usually with despair in their voice.

Thankfully, things don’t have to be too complicated. 

Asking yourself a series of simple questions involving your own financial circumstances and goals can help you figure out how to start investing in stocks.

Determine your goals

It may sound obvious but, before you start buying any stocks, you should figure out what you want to achieve by investing.

Some people invest to save for their retirement. Others may just want to beat inflation.

Understanding what your goals are is important because it can help you decide what the best stocks to buy are, taking into account your own circumstances.

If you don’t figure out what your goals are, you may end up taking on too much risk and losing money that you can’t afford to lose.

Learn more: How to choose the best investment app for you

How much money should you be investing?

Investing in stocks or any other assets doesn’t require some preset amount of cash.

Unfortunately, lots of first-time investors don’t know how much to invest and so they want a cut and dry percentage or amount of money that they should be investing each month.

Instead, investors should look at their own set of financial circumstances and see what they can afford to do.
If you have no debts and are able to save 20 percent of your salary each month, then you could probably afford to invest 10 percent of your income on a monthly basis. 

Conversely, if you are struggling to pay off your mortgage and have lots of credit card, the chances are that you’d be better off focusing on paying your debts before putting money into the stock market.

It’s also worth remembering that it’s always a good idea to keep some of your money in cash. 

Life is full of expensive surprises and, if all your money is in the stock market, you may end up having to sell off some of your investments at a loss in order to pay for emergency expenses.

Focus on the long term

Many people seem to view stock investment as a means of getting rich extremely quickly.

It would be nice if this were true but, in all likelihood, you are going to be better off investing for the long-run.

Over a prolonged period of time, diversified stock portfolios have historically risen in value and provided inflation-beating returns to investors.

Conversely, many investors that attempt to find the ‘best’ stocks to buy for short-term gains will end up losing money. This is true of experienced professionals, not just people learning to invest.

This isn’t to say that there are never short-term opportunities in the stock market or that no one makes money from them. 

But these come with risk and are hard to get right consistently, meaning you may well lose more than you gain if you invest all of your portfolio in this way.

What is your risk appetite?

Risk is arguably the most important concept to understand for anyone looking at how to start investing in stocks.

The easiest way to think about risk is that it’s a way of quantifying how much money you are prepared to lose in order to see a gain. The more risk you take on, the more you stand to lose or gain.

Your risk appetite will be determined by your own set of circumstances. 

Some simple things to take into consideration are time and money. 

If you are investing over a long period of time, you can probably afford to take on more risk than someone that’s going to need to sell off their investments in the near future.

Of course, money is also important here.

If you don’t have a huge amount of cash, either to invest or in savings, then you’ll probably want to take on less risk than someone with millions of pounds in the bank.

To help you understand this topic better, we've wrote a detailed guide to investment risk.

Commissions, fees and taxes

Investing in stocks is a great way to make money but the actual process of buying and selling them is rarely free.

Something that’s often overlooked by people learning how to invest in stocks in the UK, is the array of fees, commissions and investment taxes that you may end up having to pay along the way.

The broker that you use to invest can charge a large range of fees and commissions. Sometimes these aren’t all obvious until you’ve already begun investing with them.

For example, you could have to pay a commission for every trade you make, a mark-up on foreign exchange transactions, and even a ‘platform fee’ simply for having an account with the company.

These may seem small - or, in the case of a £10 commission and 1.5% foreign exchange charge, quite large - and they can end up eating into your investment gains massively, especially over the long run. 

For example, it’s entirely possible that you could end up spending 3 percent of the amount you invest on fees. If your investments increase in value by 4 per cent, you’ve actually only made a 1 percent gain because of the fees.

Taxes are slightly different as the UK government does give people annual allowances for money they make from investing — so you may end up paying no tax on any profits you make. 

But if you go beyond your allowances, you will have to pay tax on any money you make from investing.
Taxes and brokerage fees are both things to take into consideration before you start investing. 

Most people will want to keep their costs to a minimum, so finding a broker that charges lower fees and commissions, or even no commissions at all, is likely to be a good option. 

Having said this, it may be the case that you need or want to pay for some services that a broker provides, so paying nothing is not always the best option.

Whether or not you will pay taxes is most likely to depend on how much you invest. If you invest more money, you’ll be more likely to make taxable income from your investment. One way to avoid this is to open an ISA.

Take control of your investment fees with our calculator →

How to invest in stocks - a beginner's guide

What to invest in?

Once you’ve figured out what account to open and understood what your investment goals are, you’re going to have to actually put your money into something. 

Doing this for the first time can make people a little nervous!

When you begin looking at how to start investing in stocks, there are so many choices out there that you can feel slightly overwhelmed.

With so many options available to you, it can be hard to know where to invest your money or what stocks to invest in.

Aside from your own investment goals, understanding what’s actually on offer is a good way of taking the right steps towards making your first investment.

How to invest in stocks - a beginner's guide

Company stocks

As we’ve already seen, stocks represent ownership in a company.

This means they offer the best opportunity for you to enjoy the current or future success of a business. 

Many big name firms have stocks that you can buy. That includes a range of companies, including Nike, Apple, Amazon, McDonald’s or — of course — Greggs.

Some company stocks can be pricey. In the past, this may have meant they were prohibitively expensive for investors.

But today many stockbrokers offer investors access to fractional shares. These are parts of a single share that you can buy. For example, if a share cost $1,000, you could buy half — or $500-worth — of that share.

Stocks are generally considered to be riskier than other investments. That’s because they can be subject to hard to predict market forces that can lead to them declining in value.

Full list stocks and shares you can via the Freetrade investing app

How to invest in stocks - a beginner's guide


An exchange-traded fund (ETF) gives you exposure to a collection of stocks or other assets.

For example, an ETF might hold stocks in 20 different technology companies. Investing in this ETF would give you exposure to each of those tech firms. 

The most popular ETFs tend to track an index - like the FTSE 100 or S&P 500. 

In the financial world, an index is a group of stocks or other assets that are put together and used for analysis or gauging how a market is performing.

For example, the FTSE 100 is an index that comprises 100 of the largest companies trading on the London Stock Exchange. As such, it is often used by investors to see how the UK economy is performing.

An ETF that tracks the FTSE 100 is a simple way of investing in the companies that make up the index.

From a practical point of view, this is much cheaper and faster than buying shares in each of those 100 companies. It also provides investors with a more diversified portfolio, reducing the risk that they may lose a large amount of money.

The downside to ETFs is that they mean you cannot capture the outsized returns that individual stocks can. You can also still be subject to market crashes, some of which may have a long-lasting impact on returns.

Full list of ETFs you can trade via the Freetrade investing app

How to invest in stocks - a beginner's guide


Like an ETF, an exchange-traded commodity (ETC) tracks the price of an underlying asset. 

The difference is that ETCs, as the name implies, track the price of commodities.

Commodities are raw materials, like gold and oil, or agricultural products, like oranges and wheat.

ETCs are useful because buying commodities directly can be expensive and extremely difficult logistically. 

To understand this point, just imagine trying to buy a barrel of oil. How and where would you store it? How would you transport it? How would you sell it?

Now imagine just opening a brokerage account and clicking ‘buy’ on an oil ETC. It’s much simpler than carrying around a barrel of oil.

The downside to ETCs is less to do with the products themselves and more to do with the assets they track. Commodities such as oil or oranges can be subject to wild swings in price and understanding the markets they trade in can require a lot of specialist knowledge.

Guide to investing in commodities

What is an inverse ETF?

Popular ETFs on the Freetrade app

How to invest in stocks - a beginner's guide

Investment trusts

Investment trusts are companies that are usually set up by asset management firms. 

Once they’ve been established, they are listed on a stock exchange, giving investors the opportunity to buy shares in them.

The funds that are raised from this share sale are then used to invest in different assets.

For example, an investment trust might focus on buying stocks in the tech industry. Others hold a broader range of stocks and invest in industries as varied as telecoms, finance and energy.

What is an investment trust and how does it work

Investment trusts

Some investment trusts on Freetrade

How to invest in stocks - a beginner's guide

One popular type of investment trust is known as a real estate investment trust — or REIT. 

As the name implies, REITs invest in real estate. They’re a good way for people to put money into the real estate market, without having to pay huge sums of cash for a home. 

The obvious downside here is that many people want to buy a home as both an investment and a place to live. Investing in a REIT can help with the first of these goals but not the latter.

Like ETFs, investment trusts are a great way to get exposure to lots of different stocks or assets via one investment.

A key difference between the two is that investment trusts tend to have higher fees. This is because they are typically actively managed - meaning that they do not simply track an index, but a fund manager is required to make decisions on which stocks to buy and sell.

Full list of Investment Trusts you can trade via the Freetrade app

How to invest in stocks - a beginner's guide

How to build a diversified portfolio

Anyone investing in stocks should look to hold a diversified portfolio. 

Your portfolio is made up of the stocks or other assets that you have invested in. 

In simple terms, having a diversified portfolio means that you hold a range of assets. So if you’re looking at how to diversify your portfolio, you need to consider how you spread out the money you’re investing.

That might mean that you buy stocks in different industries. An investor with a diversified portfolio might hold stocks in tech, travel, energy, clothing and construction companies.

You don’t have to limit yourself to stocks. For example, you could put a portion of your money into stocks but also invest in ETFs, REITs and ETCs. 

It’s also important to remember that cash can be an important part of your portfolio. 

First-time investors will often look at how to invest in stocks and then start thinking that they have to put all their money into them. But holding cash is important. 

You may need money to pay off emergency expenses. Alternatively, if there are new opportunities in the stock market, you will be better placed to take advantage of them if you have cash. 

If you don’t, you’ll have to sell off assets — something that can stop you from making long-term gains or lead to you losing money.

Learn more:
2021 investment checklist - Resolutions to stick to
5 things you shouldn’t do when you invest
5 things we can learn from investor Terry Smith
10 investment principles

How to invest in stocks - a beginner's guide

How to find the right stocks to invest in

Finding the best stocks to buy requires a bit of detective work.

Ultimately, a company’s goal, whether it sells shoes or pumps oil from the ground, is to make money. Your job as an investor is to figure out which companies are best placed to do this.

There are a number of ways that you can examine a company and figure out if you want to invest in it.

Probably the most common way is to look at its finances. You can look at how much a company is making in revenue, how much debt it has or how much profit it's making relative to its revenue.

Of course, you can also look at the company’s products or services and any external forces that may influence them. 

For example, if a video game company has just released a new game that’s proving hugely popular, there’s a good chance that firm will, in the short-term, make for a good investment.

Another key metric that investors will look at is called the price-to-earnings ratio. This tells you how much profit a company makes, relative to the price of its shares. 

If a company is making lots of money but has a very low share price, some investors might see this as a good buy opportunity.

How to invest in stocks - a beginner's guide

The reverse is also true. Investors may be tempted to sell shares in a firm that makes almost no money but has a very high share price.

First-time investors may be tempted to look at the price-to-earnings ratio and see it as the ‘stock investment for dummies’ golden ticket for guaranteed investment success. Sadly this isn’t the case.

There is no perfect price-to-earnings ratio that will tell you when to buy and sell a stock. Instead, it’s just one indicator of many that can be used to guide your investment decisions.

More often than not, a ratio like price-to-earnings is best used to compare companies in the same sector to see how expensive (or cheap) they might be relative to competitors.

This points to a wider difficulty in investing. It’s tricky to pick exactly the right stocks and easy to make investment mistakes

Understanding the different mechanisms that make the stock market function and how prices can change is one way to prevent losses.

How to invest in stocks - a beginner's guide

When to sell your stocks

As with so many other things in the world of investing, deciding when to sell your stocks will largely be determined by your own goals and circumstances.

This means that you are going to have to do some thinking and self-examination — there is no ‘golden bullet’ that can tell you exactly when you should or shouldn’t sell!

For example, if you are investing in stocks for your retirement, it may be best to simply leave them untouched until you retire. Making sure you have enough cash to pay for any expenses you have can help prevent you selling off stocks before this.

This is not to say that you should never sell stocks before you need cash. It’s important to keep track of your stocks and shares to see how they’re performing.

For example, if you have seen massive gains on one stock investment, you may want to sell off a part of those holdings or even all of them to realise that gain.

Similarly, you may have invested in stocks that have risen massively in value. If you believe those stocks are now overpriced and are likely to fall in value again, you may want to consider selling then.

What are Freetrade investors buying?

If you’re still not too sure how to invest your money, it might be worth looking at what others on Freetrade have bought.

It’s important to remember that each Freetrade customer will have their own investment goals and risk appetite so you should adjust these insights according to your own position.

Always keep your own circumstances front-of-mind when making investment decisions.

Just remember that this should be the beginning of your investment journey. There are always things to learn, whether it's about risks or asset classes.

Top 10 stocks on Freetrade

We surveyed Freetrade investors with a portfolio of £10,000 or more and ETFs dominated the top 10 most popular investments.

ETFs tracking the FTSE 100 and S&P 500 were first and second in the list respectively, with a NASDAQ 100 tracker in seventh place, providing exposure to the 100 largest stocks on the tech-focused New York market.

Two banks, Lloyds and Barclays, were also on the list, as were two energy businesses — BP and Shell.

Top 10 stocks on Freetrade

Top 10 assets for Freetrade users investing £10k in 2019

Making up the rest of the top 10 were Tesla, Apple and Physical Gold. The last of these is an ETC that tracks the price of gold.

Investing an even amount of cash in each of these assets would probably not make for the most ideal portfolio. 

The pair of oil and banking companies, for example, may mean you are overexposed to those industries, not to mention the fact that Tesla shares are notoriously volatile.

Still, you could reduce your level of risk by allocating more cash to the ETFs and less to the riskier assets, like Tesla and Physical Gold.

Learn more: Last week's most popular stocks on the Freetrade app

Top 5 sectors on Freetrade

Another interesting set of data from the Freetrade customers we sampled is the sectors that they invested in when buying stocks.

The financial services industry tops the list here, with 17 percent of all orders being in banks, insurers and credit card providers.

Top 5 sectors on Freetrade

Top 5 sectors for Freetrade users investing £10k in 2019

Next on the list is tech, which includes big names like Apple, Amazon and Facebook. Just over 13 per cent of all the sampled orders were in tech firms. 

A similar number of orders were made in the energy and food-and-drink industries, with approximately 16 percent of all stock investments made in each.

Last on the top 5 list is healthcare, which managed to attract close to 7 percent of our £10,000 investors’ orders.

Have a question or want to find out more?

The Freetrade community is a great place to ask questions if you’re unsure about something.

You can also learn more on our blog or sign up to the Weekend Read to learn about different companies and concepts from the stock market.

In the meantime, you can browse through the Freetrade app and see if there’s anything that fits with what you’re looking to achieve. Just don’t go all-in on Tesla...

This should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

When you invest, your capital is at risk. Tax rules for ISAs can change and their benefits depend on your circumstances. The value of your portfolio can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future results.

Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

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