“Why buy shares online?” is a question asked ever more frequently by UK investors both young and old. While pages can be written on Bulls and Bears and Profits and Losses, below are a handful of simple reasons from tax to technology why you might want to consider it today.

1. Returns

Everyone has heard stories of people making serious money from online share dealing. While many may be slightly exaggerated (who raves about their losses?), that’s not to say that decent returns can’t be had. Significant annual returns aren’t unheard of with the right trading plan, strict focus and attention to costs. 

That far outstrips anything on offer at a UK bank, even if interest rates did return to the good old days of 5%. The returns you make will obviously be related to the trading decisions you make and profits aren’t guaranteed from online share dealing (or indeed anywhere) but should you trade smart and not allow excitement get the better of you then you could well be successful.

2. Recession Proof?

Online share dealing offers you the benefit of making money when the market is rising as well as when it’s falling. Shorting or Short-selling involves you selling shares which you have borrowed from your broker (at a small cost). The hope is that you can buy back the same number of shares at a later date in the market at a lower price. Once you have returned the borrowed shares to the lender, you profit from pocketing the difference. Beware though. While shares you hold can fall to zero (100% loss), shares you have borrowed/owe can rise in price forever (infinite risk).

3. Lifestyle Benefits

Long gone are the days of share traders having to be on the open-cry trading floors of major stock exchanges, or on the phone to one at least to be able to participate. Trading is no longer the preserve of high-flying city types making millions. Anyone with internet access can get involved, meaning you don’t even need to leave home to start trading. You can change 9-5 for any hours you like, with trading opportunities available 24hours a day, 5 days a week.

Online brokers are also now in plentiful supply with many new names having launched as well as the old guard reacting to the market change. Competition means pricing is as competitive as it has ever meaning it’s never been easier and more cost efficient to trade by yourself.

4. Tax Benefits

As they say, “Death and taxes: the two surest things in life”. However, online share dealing still benefits from capital gains tax allowances, permitting you to make annual net share dealing profits up to a certain amount without paying any tax. Many hope this allowance will climb higher. As of April 2014, certain shares (AIM + High Growth Segment) also benefit from being Stamp Duty tax exempt. As always tax treatment depends on individual circumstances.

5. Practice Makes Perfect

Many investment opportunities require the individual to display knowledge/experience before being allowed to participate. Online share dealing is different, however, with nearly every broker offering demo/trial accounts for a short period allowing you to experience the trading technology that is out there and learn how their software/platform works first.

This allows the novice to get a taste for trading the markets without having to risk any cash, but also allows the more experienced investor to see what differs from one provider to another or indeed to simply trial a new investment technique.

What are you waiting for? Have a go. See what it’s all about.