Considering an investment in Royal Bank of Scotland? You’re in the right place. If you don’t know the ins and outs of investing, we’ll take you through all the basics of stock investing and help you make an RBS investment that adds up. If you’re already familiar with online stock investing we can help you to identify the best brokers and make smart, clued up decisions with your money. If you don’t feel ready to take the plunge yet, keep reading.
Compare the best platforms to invest in RBS shares
You’ll need a reliable online broker to help you buy RBS stock. Our helpful investment guides will run through the top brokers and explain the best investment methods for buying shares in RBS.
Trade RBS shares, right now
Buying and sitting on your hands for months or years isn’t for everyone. If you want to try and make money quicker, you can opt to trade RBS shares instead. When you trade shares, you’re buying and selling within a much shorter period of time, sometimes even on the same day (this practice is called day trading). We’ve reviewed low-fee online brokers that are best suited to trading shares.
How to buy RBS shares in 7 simple steps
It’s important to have a plan before you invest in RBS shares, so we’ve put together a seven-step approach to get you where you need to go.
- Research the company. What is RBS (Royal Bank of Scotland)? How did it grow to become a major player in Europe’s banking and insurance industries? Are the company’s fundamentals improving, or showing signs of weakness? Get to know as much as you can about the company, so you’ll understand more about your investment.
- Learn the basics. You’ll need to learn how to place trades, of course. But you’ll also want to know the terminology that goes with investing. Key terms include bid price, ask price, market orders, limit orders, earnings growth, revenue growth, return on equity, profit margins, share-dealing and trading.
- Share-dealing vs Trading. Share-dealing refers to buying stocks in a company and making money on it, by selling shares at a higher price than your buy price. You can also make money from dividends, if you buy shares in a company that issues them. Trading shares is a shorter-term approach, and can include day trading. When day trading shares in RBS, your attention is predominantly focused on the stock’s chart – the company’s long-term future isn’t necessarily relevant.
- Set a budget. When you start investing, use a smaller budget, perhaps £1,000. RBS trades near £250 a share, so you can buy four shares with that budget. As you gain investing knowledge, you can get more aggressive and invest more capital.
- Choose a broker. There are scores of online brokers that can execute trades and help you buy RBS shares. Go with a broker that offers low transaction costs, a strong reputation, and an easy-to-use platform.
- Evaluate the broad market. When the stock market surges into a big uptrend (‘bull market’), most stocks will rise. When the market falls into a steep downtrend (‘bear market’), most stocks will fall. Keep close tabs on the broad market and be ready to change course as needed.
- Make your first investment. You now understand how RBS operates. You’ve got a feel for the basics of investing. You’ve set a modest initial budget, picked an online broker, and confirmed that the market’s doing well. Log in to your online brokerage account, type in RBS’ ticker symbol (RBS), ensure that the stock isn’t trading too high for your comfort level, then click Buy.
Ways to invest in RBS – share-dealing vs trading
You can buy, sell, and trade shares of RBS online using multiple different methods. Here are a few you can try:
Share-dealing refers to buying RBS shares and then holding them for a longer period of time, a longer-term approach than trading shares for a quick profit.
- Pros: If you buy a strong stock at the right time, holding on for longer could result in big gains. Share-dealing allows you to focus on the company’s fundamentals rather than worry about reading a stock chart.
- Cons: Buying and holding a stock for a long time ties up your money for longer, so it’s not accessible to make further trades. If RBS share prices start falling after you buy, you could run head-on into a harsh correction.
A CFD is a contract for difference. CFDs are investment derivatives that let you speculate on the price movement of investment assets. Some of those assets include commodities, forex and shares of RBS. When CFD trading, you buy a contract, not the actual asset you’re trading.
- Pros: You can trade with leverage, enabling you to put down just a percentage of the total trade value, with the CFD broker covering the rest. When trading with leverage, you can bank a bigger gain than you would if you’d only traded with only your own money.
- Cons: If the stock falls, a leveraged trade will produce a bigger loss than if you’d only traded with your own money. Leave a leveraged CFD position open more than a day, and you’ll likely have to pay overnight fees. CFD trading means you miss out on the voting rights and dividends that come with owning actual shares in certain companies.
How to buy, sell and trade RBS shares for beginners
If you’re getting close to buying your first RBS stock, here are some important considerations to keep in mind:
Buying RBS shares
An online broker is a simple platform you can use to buy RBS shares. Buying shares makes sense if you want to hold for a longer period of time. Log in to your online brokerage account, type in RBS’ ticker symbol, and click Buy.
You can use different approaches when selling RBS shares. You can hold for as long as possible and try to sell for a big profit. Or you can sell if the market starts to weaken, thereby protecting your money.
You can trade RBS shares with a conventional online broker, or with a CFD broker. With a CFD broker, it’s important to know the risks that come with leveraged trading and take account of the extra fees that CFD brokers can charge.
Our top tips for investing in shares of RBS
Here’s a summary of important points to remember:
- Know your budget. Don’t invest more than you can afford to lose, especially when you’re new to investing. You can always invest more money once you acquire more experience.
- Choose the right approach. There’s a wide spectrum of investment options out there, from hyper-aggressive approaches to more conservative styles. Find an investment strategy that suits your goals, and the amount of risk you’re willing to take.
- Don’t react to emotions. Follow a sound investing plan and you’ll be more likely to make money. Without a plan, emotions such as fear and greed can impair your judgment and cause you to make bad decisions.
- If market conditions change, pivot. Be ready to sell if the market starts falling sharply. Always keep the state of the market in mind when making investing decisions that go beyond short-term trades.
- Learn from your mistakes. Everyone makes mistakes. As long as you learn from those mistakes, you’re making progress. Review your trades, figure out what went wrong, then take steps to do better next time.
Unsure which platforms to use?
Not sure where to go from here? Run through these key investing considerations:
- Budget size. If you have a budget of £1,000, keep things simple and just buy and hold a few RBS shares to start with. If you have a bigger budget (say, more than £10,000), you have more options, such as day-trading and CFD trading.
- Risk assessment. Don’t risk overly ambitious investment strategies until you have a better idea of what you’re doing. You can try more complex investing options at that point too. For instance, you can sell shares in a stock short, betting that the price will fall. You can also protect your investment. Say you buy RBS shares of RBS at £250 per share. You can then put in a stop-loss order at £225 per share. That way if shares of RBS start to tumble, you won’t lose more than 10%.
- Market conditions. In a bear market, defensive investment strategies such as buying bonds or commodities often make more sense than buying growth stocks. On the other hand, if the market’s doing well, you can always buy RBS shares.
- Know your investing goals. If you’re trying to make money quickly, day trading could be a good bet. If you think a stock could be a big winner for years to come, buy and hold shares instead.
- Follow emerging trends. Advances in technology have changed the way the financial services industry operates. Monitor how RBS evolves and incorporates new technologies.
What is RBS?
Briefly the largest bank in the world before the 2008 financial market collapse, Royal Bank of Scotland remains a global power in the banking and insurance industries. The company employed 67,000 people as of the end of 2018, with revenue for the year exceeding £13 billion. For more information on the company, including charts, live prices, analysis, and more, visit our RBS stock price page.
Try our stock market courses for beginners
Still not ready to invest in RBS shares? That’s ok. Learn more by digging into our easy-to-follow educational courses. Once you’ve gained a better grasp of how to invest, you’ll have a better chance of making money by buying shares in RBS.