Step-by-Step Guide to Investing

This Step-by-Step guide to Investing shows you how to understand company finances, how to value shares and how to practise certain types of investing strategies. As well as what to look out for and how you can avoid simple mistakes. Learn to invest like a professional from a professional. This guide was created exclusively for ShareScope by former investment analyst, author and renowned financial journalist Phil Oakley.

Chapter 1: Introduction

Updated: August 2024 If you are reading this, the chances are that you’ve decided to take control of your investments or are doing so already. You may have been investing for some time but feel you could do better. Many of you may be new to investing, or have previously left the management of your

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Chapter 2: Balance sheets

Updated: August 2024 ShareScope is packed full of useful financial data. This data holds the key to understanding the financial health and value of any company you are looking at. To a new or inexperienced investor, the mass of numbers may seem a little daunting. That’s quite understandable but it shouldn’t be. If you understand

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Chapter 3: Analysing balance sheets

Updated: August 2024 In the previous chapter, we looked at how a balance sheet was put together and the numbers that go into it. In this chapter, we are going to take all those numbers from the balance sheet and turn it into useful information for investors. A company’s balance sheet contains a wealth of

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Chapter 4: Income statements

Updated: August 2024 Hopefully, you will now understand balance sheets and how important and useful they are. Let’s move on to a set of numbers which most people think are even more important – profits. Just as we did with balance sheets, I am going to explain the numbers in an income statement in this

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Chapter 5: Analysing income statements

Updated: August 2024 Now that we’ve dealt with the basic format of an income statement it’s time to move on and show you how ShareScope turns those numbers into really useful information. Knowing your way around an income statement is vital to understanding what makes a company tick. However, to get the most out of

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Chapter 6: The cash flow statement

Updated: August 2024 The last four chapters have been spent looking at the balance sheet and income statement and how to use them. In this chapter, we will move on to arguably the most revealing piece of financial information that a company gives investors – its cash flow statement. When a company’s financial results are

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Chapter 7: Analysing cash flow statements

Updated: August 2024 We did a little bit of cash flow analysis in the last chapter. In this one, we look at the cash flow ratios that ShareScope calculates for you and what they can tell you about a company’s financial performance. The key issues that this chapter will point out are: Cash flow is

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Chapter 8: Is this a good business?

Updated: August 2024 In this chapter, we look at ways to measure how good a company is at generating profits from the resources at its disposal. We will be looking at what the company is getting back in profits as a percentage of the money it has invested. This is the real measure of how

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Chapter 9: Share valuations 

Updated: August 2024 In the previous chapter, we looked at how to find out if a company was any good or not. In a nutshell, good companies get back a lot of profit or cash flow as a percentage of the money they invest – they earn high financial returns. How to tell when shares

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Chapter 10: Value investing

Updated: August 2024 In the next three chapters we are going to be looking at three different styles of investing, starting with Value investing. The previous chapters have hopefully shown you how useful SharePad can be when you are sifting through the finances of a company. Information that might have taken you hours or even

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Chapter 11: Dividend investing

Updated: August 2024 If you are watching or listening to the news at the end of the day you will usually be told what happened to the stock market that day. More precisely, you will be told whether it went up or down in price. Yet investing in shares is not just about changes in

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Chapter 12: Growth investing

Updated: August 2024 The last couple of chapters have focused on two particular styles of investing – value investing and dividend investing. Both these approaches to owning shares are largely based on the current state of a company – its profits and its dividends. In this chapter, we are going to turn our attention to

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Chapter 13: Investing in bonds

Updated: August 2024 Despite its name, ShareScope is not just all about shares. It can help you with other investments as well. In this chapter, I’m going to show you how you can use the information available to invest in bonds.. What are bonds Bonds are IOUs. Just like shares you can buy bonds on

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Chapter 14: Putting it all together

Updated: August 2024 In this final chapter, I use the data and tools in ShareScope to show you how I analyse shares. Even if you are not a subscriber, you should find this article extremely useful as a guide to making informed investment decisions. One of the main selling pitches of the fund management industry

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