How to buy NatWest shares (NWG)
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82% of retail CFD accounts lose money.
This guide explains the history of NatWest and its recent rebrand away from its tarnished Royal Bank of Scotland name. You can find a history of how NatWest stock has performed and what the outlook for the future looks like.
Compare the NatWest trading platformsCopy link to section
If you have all the information you need and just want to know what the best place to buy NatWest stock is, check out one of our trusted brokers below. If you’re not ready to invest yet, keep reading for more information on NatWest.
77% of retail CFD accounts lose money.
How to buy NatWest stock, a step-by-step guideCopy link to section
Nowadays, investing in a public company is simple, even for the most inexperienced investor. The following list explains the steps you need to take to complete your investment.
- Choose a broker. To get started, you need to use an online brokerage platform. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in NatWest shares.
- Place an order for NWG stock. Now navigate to the stocks section of your chosen broker. Here, you can search for NatWest’s ticker symbol (NWG) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to purchase and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your NatWest shares will be listed in your account. Congratulations, you’ve just bought shares in NatWest!
What is NatWest? And should I invest?Copy link to section
NatWest Group (LON: NWG) is a financial and insurance institution, formerly known as the Royal Bank of Scotland Group, that has been majority state-owned since 2008. The original Royal Bank of Scotland was formed out of a merger in the 1960s, before buying out National Westminster Bank in 2000. It was rebranded as NatWest Group in 2020.
The British government bailed out the Royal Bank of Scotland in 2008 and maintains a 58% stake in NatWest Group. Another factor weighing on the group is that British banks have to abide by rules and interest rates set by the central bank – the Bank of England (BoE) – which means the decision over whether to pay out dividends can be taken out of their hands, as they were in 2020 in response to the pandemic.
Banks are operating in a difficult time at the moment, and that is particularly so for NatWest as it must also deal with the fact that the government is determined to exit its stake by 2025. Its healthy balance sheet might point to strong fundamentals but even when it is allowed to restart dividends it could focus on buying out that stake first, which would make it a less appealing investment in the short term at least.
How has the company performed in recent years?Copy link to section
One of the aims of changing its name away from Royal Bank of Scotland is to distance the new NatWest from its difficult past. In the aftermath of the pandemic the stock traded just above 110p, a fraction of its peak and below even its 2009 lows.
Low base interest rates have weighed heavily on all banks for a number of years and long term profitability is difficult to find with margins so fine. Base interest rates haven’t been above 1% since before the 2008 crisis and are now hovering around 0%, cutting NatWest’s loan margins finer than ever. NatWest has suffered as a result, although even despite its struggles in recent years, its stock went into 2020 up 45% compared to 2016.
Is it a good time to buy NatWest shares now?Copy link to section
Banks tend to be a good guideline for the health of the overall economy and the pandemic is a reminder that this type of investment is always vulnerable to unpredictable market events. NatWest now has healthy capitalisation and surpluses on the balance sheet, a far cry from its troubles in 2008. The government’s deadline for selling its entire stake in the group is 2025, which is likely to be the first port of call for NatWest before starting to pour some of its funds back into dividends.
Other question marks are more to do with the economic situation as a whole, which means any potential buyer needs to assess how banks may benefit from more certainty in the aftermath of a UK-EU Brexit deal and as the immediate pressures of the pandemic are reduced. NatWest is also the bank most exposed to small business loans in the UK, businesses that are especially vulnerable to the pandemic.
Those factors will affect NatWest stock in the short to medium term, while longer-term investors will want to look for signs of interest rate changes and especially of NatWest buying itself out of the government stake that weighs on its share price. You can get NatWest stock information, follow all the latest news and read our up to date market analysis below.
Buying, selling and trading shares for beginnersCopy link to section
What to do before buying sharesCopy link to section
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in NatWest shares.
- Research the company. You should always examine the fundamentals of a company before investing. What is NatWest? How did the company get its start? How did it grow? Is NatWest’s revenue and profit growth picking up? Is the company innovating? The more you know about NatWest, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in stock investing, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. The Invezz news section can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?Copy link to section
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade NatWest shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for NatWest stock, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any NatWest shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold onto your stock for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that NatWest’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade NatWest shares outright, or you can use CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD tradingCopy link to section
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors who prioritise the long-term tending to go for share dealing, and those looking for short term gains enforcing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealingCopy link to section
Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from quarterly dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do a thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through recurring dividends
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
CFD TradingCopy link to section
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into NWG shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take the Invezz stock trading course and read the Invezz guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in NWG stock on this page. If, however, you’re ready to get involved straight away, simply select one of the brokers in the table above and sign up.
How to choose a brokerCopy link to section
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large, these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to purchase the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to make investments. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to use a specific payment method, such as PayPal. Not all brokers accept every payment method, but by using our comparisons, you can search for the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
Latest NatWest newsCopy link to section
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Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >