(Original post by Axion)
Firstly, you can invest £400-£500 but you cannot expect huge returns. For example, if you invested in a large company like RSA Insurance, you would generally only get a circa (15-25%) overall fluctuation within a year either positvely or negatively. Therefore at best you are looking at around £125 profit over the period of a year. However, that is decent, but there is notthing to say the share will definitely go up. RSA is an example of a low risk share.
Other shares are high risk. These tend to be penny shares as their share prices are low but often highly volatile. For example, a penny share such as Tower Resources, may experience a fluctuation of between 30% and 120% over the period of a year. Therefore you could get a greater return although the downside is greater (obviously only 100% downside rather than 120%).
Therefore the first thing you must consider is risk. (NB: if you ahve used bulletin boards, DO NOT, I repeat, DO NOT, purchase your first share on ANY of those recommendations as they are usually ramps (people who want a share price to go up by people buying it )).
The best way to research a company is to read:
- broker reports
- annual reports on their website
- recent RNS' they have released (regulatory news stories)
- check what they have in the pipeline for the future. If no news is due soon, why invest?
- learn a bit about charting to determine an entry point. As a vague rule, if you decide to buy a share, set an entry point at least 4% lower than the current price. If you miss the entry point so what? be patient, more often than not it will return. If you get your entry point, great, you saved yourself some money.
Also, I would recommend initially investing in a UK based company rather than a foregin company such as Apple due to charges and complications. personally i also think apple is vastly overvalued and its share price will drop soon. There are literally tens of hundreds of companies listed on the LSE and the AIM market in the UK, the majority of which you have probably never heard of with varying risk profiles, and varying reasons to invest and being in different industries.
Research at least 5 companies before you even think to invest. And by research do the above methods. Then, once you've decided upon an industry and risk profile, assess the company you have chosen and then FURTHER research 3 other companies wiuth similar risk profiles and roughly the same size as the company you avhe chosen comparrable by market capitalisation - i.e. the value of the company). This will help you understand what a 'good' deal is.
Now to the point you wanted. To invest using the ISA initially transfer the sum into a Stocks and Shares ISA. A stocks and shares ISA gives you tax free earnings on any profits on a company that is either:
dual listed on more than one exchange
Listed on the main board of the LSE
Then, seeing as halifax is nice and easy, use their interface to choose your share and simply enter the amount you want to buy and its pretty much done. The interface is definitely self explanatory.
Good luck. Hope this helped