Introduction

This section is all about choosing the right shares to fill the equity part of your balanced portfolio. We should point out that buying shares directly from the stock market isn't the only way to fill out your portfolio - you can use stock market linked funds too.

To kick off - you might not have any shares at the moment, or you might have loads. You may have them from when your building society turned into a bank, from when the utilities were privatised, or even through an SAYE scheme. Whatever your circumstances, here's the low down on shares, what's in them for you, and how to pick the cream of the crop.

The low down on shares:

• shares are a teeny, tiny bit of a company. Their worth is based mostly on how many people want to buy that bit of the company (stands to reason, really). Of course, everyone will want part of a company that is doing well or has great prospects. Share prices reflect this. They'll be high when demand is high and low when demand is low.
• companies sell shares as a way to raise cash to invest back into their business.
• buying and selling takes place in a market. To make sure the process is fair, rules and regulations are set and monitored in the UK by the London Stock Exchange.