‘Ask the right questions’: what you need to know before buying shares
The Guardian offers guidance for would-be DIY investors on what to check before buying individual shares, prompted by the surge of interest following SpaceX's stock market listing. Unlike investing in funds, buying shares directly typically means holding a smaller number of companies, leaving investors more exposed to those firms' individual fortunes, so experts stress the importance of researching key financial data before committing money.
More than 100,000 UK investors reportedly applied for nearly $1bn of SpaceX shares, highlighting the growing appetite for direct stock purchases. Fidelity International's Jemma Slingo and Interactive Investor's Victoria Scholar recommend checking metrics such as the price-to-earnings (P/E) ratio, which compares share price to earnings per share; the average FTSE 100 company has a P/E of about 12, with 15 sometimes used as a rough benchmark, though this varies by sector. Financial data can be found via sites like Investegate and Yahoo Finance, or investment platforms such as Fidelity, though experts caution that past performance does not reliably predict future returns.
- SpaceX's listing sparked a surge in UK DIY share buying
- Experts urge checking financial data like P/E ratios before investing
- Past performance is not a reliable guide to future returns