this is the Selftrade logo

Money you've put aside for short-term needs has to be accessible and safe – you want to be sure it's still there when you need it. But the price you pay for that accessibility and certainty can be a lower return. Cash savings will earn interest, but at the same time the buying power of your money can be eroded by inflation.

Investing your money on the other hand means a longer term commitment in exchange for potentially greater returns, or losses. True those returns are not guaranteed and you`ll be taking the risk that you may not get back what you originally invested, but by investing in the stock market you may see the capital value of your money grow and may also receive income by way of dividends.

FTSE 100 Price Chart

Not all stock market investments carry the same degree of risk. Typically, the riskier it is, the greater the potential reward. So you can manage your risk by selecting lower-risk investments. And you can spread your risk by investing in a range of different investment types, or by investing alongside others, pooling your money to be managed by professional fund mangers. You can read more about the different types of investments available, and their different characteristics in the Choosing investments section.

A good place to start is with the guides in the Research & Education section: they'll help aid your development from novice to seasoned investor.

What's it all mean? Every industry has it's own terms to get to know. Find out what those terms mean with our easy to use glossary.