Share trading is one of the most popular and well-known forms of financial trading. Here are three reasons why.
First of all, shares can offer healthy profits. If you buy when prices are low and sell when they are high, you can get a good return.
Those returns can often be higher than other forms of investment, like cash assets. While share prices tend to fluctuate, over the long term they usually provide greater returns than cash, bonds or even property. That’s why investors will often try to hold on to shares for at least five or ten years.
When you trade shares, you don’t always have to rely on them increasing in price for you to earn a profit. You could receive a dividend, or a portion of the profits made by a company you have shares in.
Dividends are usually paid out twice a year, and the amount you receive depends on how much profit the company has made, and how much the management chooses to distribute to shareholders. Some companies, for instance, choose not to offer dividends and will instead reinvest all profits back into the business.
3. Global shares
There are thousands of shares to choose from around the world, so the options available to share traders are huge. With IG, for instance, you can trade international shares in local denominations, and our fee to convert currency is just 0.3%.
You can even trade some US shares outside of their exchange’s opening hours, to make the most of company announcements.