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How to buy Royal Mail shares
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This guide explains everything you need to know about investing in Royal Mail; from its recent market performance to the best places to buy Royal Mail stock, we have all the information you need.
Compare the best Royal Mail trading platformsCopy link to section
If you have all the information you need and just want to know where to buy Royal Mail shares online, simply visit one of our trusted brokers below. We’ve assessed all the best platforms and compared them so that making the right choice for you is quick and easy. For more on Royal Mail, scroll down.
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How to buy Royal Mail stock, a step-by-step guideCopy link to section
Investing in Royal Mail is a simple process, even for the most inexperienced investor. The following list explains the steps you need to take to complete your investment.
- Choose a broker. In order to invest, 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 Royal Mail shares.
- Place an order for RMG stock. Now navigate to the stocks section of your chosen broker. Here, you can search for Royal Mail’s ticker symbol (RMG) 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 Royal Mail shares will be listed in your account. Congratulations, you’ve just bought shares in Royal Mail! Explore the Invezz website for more information on the stock market.
What is Royal Mail? And should I invest?Copy link to section
Royal Mail Group (LON: RMG) is responsible for the British postal service and owns international delivery and logistics companies in the form of Parcelforce and General Logistics Systems. Dating all the way back to the 16th century, Royal Mail was a public entity for most of its history before floating on the London Stock Exchange in 2013. The British government retained a stake until 2015, when it sold off its remaining shares.
General Logistics Systems offers an international B2B delivery service and has been growing significantly even as the rest of RMG’s assets have struggled. The rest of the Royal Mail group, particularly its letter delivery service, is starting to look outdated, while its parcel service has to battle an increasingly competitive delivery environment. Read on to find out more about the positives in its favour and how RMG is trying to use technology to modernise and cut costs.
How has the company performed in recent years?Copy link to section
Royal Mail initially performed well after its 2013 floatation. Years’ worth of steady returns kept up until the second half of 2018, at which point it fell into a decline. Driven by an overreliance on letter delivery at a time when letters and mail advertising has been on the decline, RMG lost three-quarters of its value from its May 2018 peak of 630p. In the midst of the 2020 pandemic, the stock was trading at 145p.
The departure of CEO Rico Back in the midst of the coronavirus crisis helped jump start RMG into performing better after the initial wave. His tenure encompassed the worst of Royal Mail’s market performance, not least because of his extremely poor relationship with postal workers unions.
Along with Back’s departure, a steep increase in parcel deliveries helped increase revenue in 2020 and push Royal Mail towards profitability. It was able to achieve that despite higher costs and a drastic fall in letter delivery, and that revenue drove back up above 300p.
Is it a good time to buy Royal Mail shares now?Copy link to section
The pandemic opened up a window of opportunity for Royal Mail. It capitalised on a surge in parcel delivery to announce a revenue increase of over £400m. It hired more staff and sped up its modernisation efforts to try to move towards a more sustainable long term operation. On the negative side, it cancelled its dividend and is battling a long term fall in revenue.
Although the government no longer has direct control over Royal Mail, the group is still affected by tight regulations and a unionised workforce. Its attempts to make radical changes have run into union resistance and it took two years to reach a detente in its most recent battle. The regulator, meanwhile, obligates that letter post be maintained for six days a week, even Royal Mail’s letter delivery revenue wanes.
These are just a couple of factors that could make Royal Mail a risky investment. It has been slow to adapt to a changing world in the past and it may need to show more signs of that changing to win back investor confidence. You can keep track of Royal Mail’s stock market performance, as well as the latest news using the links 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 Royal Mail shares.
- Research the company. You should always examine the fundamentals of a company before investing. What is Royal Mail? How did the company get its start? How did it grow? Is Royal Mail’s revenue and profit growth picking up? Is the company innovating? The more you know about Royal Mail, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, 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 reviews of brokers 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. Our news page 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 Royal Mail shares. Here’s a quick run-through of what’s involved in each.
Buying Royal Mail
This process involves finding a broker and placing an order for Royal Mail 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.
Selling Royal Mail
When you sell any Royal Mail 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 for the long-term, hoping to benefit from the company growing steadily throughout. Or, if you see that Royal Mail’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 Royal Mail
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 Royal Mail shares directly, 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 more long-term investors tending to go for share dealing, and those with a focus on short-term gains pursuing an 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 buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from being paid regular dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do 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 by issuing regular 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 RMG 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 our course on stock trading and read our CFD trading guide to get you up to speed.
If neither of these options appeals to you, then you can find a variety of other ways to invest in RMG stock on this page. If, however, you’re ready to get involved now, simply select one of the brokers in the table above and get started.
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 invest. 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 Royal Mail 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 >