Do you want to get rich quick in the stock market?

Everyone wants to know the secret of getting rich quick, don’t they? But can it be done though buying shares?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

If I had a pound for everyone who’s ever asked me for the next hot ‘get rich quick’ share tip I’d be getting, well, slightly richer quite slowly.

Piling into the latest popular stock when everybody is already bigging it up can be a serious mistake. By that stage, you’re often looking at a bubble-style over-valuation, and losing money from that point is more likely than gaining.

I think Purplebricks is an example — thanks to successful advertising, people who wouldn’t normally buy shares are getting in. Now, I’m not saying you need to find secret stocks that nobody has heard of, just keep away from the hyped ones.

Going for penny shares can be a mistake too. The idea here is that, say, a 10p share must have more upside than a £10 one. But a company with £10 shares could potentially do a 100-for-1 stock split at any time and end up with 100 times as many shares in circulation at 10p — without any change in its prospects whatsoever.

Some suggest you have less to lose with a penny share too, but that’s nonsense — the most you can lose out of every investment is 100%, regardless of the share price.

Invest, don’t gamble

Approaching the stock market like a gambling habit can be ruinous, and I’ve seen many would-be millionaires doing it. They buy what they think is going to be hot, the quick profits don’t materialise, so they sell and move on to the next big thing.

On average, you might expect to at least break even like that, but that reckons without dealing charges and the price spread — and the latter is bigger with penny stocks. Look at President Energy, for example. Right now you’ll have to pay 8.25p to buy a share, but you’ll only get 7.5p if you sell one — you’ve lost 9% before you even start, and if you trade too often that will mount up to a lot of wasted money.

Trying to time the market is unlikely to get you rich quick either. Plenty of folk examine chart formations and patterns, and try to guess the short-term future from them. Many report success too, but none of the investment greats over history has ever been a chart-follower.

Trying to time the ups and downs and get in and out just when it’s right is another losing strategy.

In fact, any kind of short-term approach is likely to be a poor one, as nobody has yet managed to come up with a reliable way of telling where the market will go tomorrow, next week, or next year. It’s only when we get to five-year and 10-year periods and longer that any kind of predictability starts to emerge.


So you can’t get rich investing in shares? No, that’s not what I’m saying at all. You very much can, but you need to take a long-term view of it, and think like an investor and not like a gambler. For me, that means buying dividend-paying blue-chip shares, and keeping them for decades while reinvesting the dividends.

According to Barclays‘ annual Equity Gilt Study, if you’d invested £100 in the UK stock market in 1945 and reinvested all your dividends in new shares, today you be sitting on a stunning £180,000 after inflation.

And that’s what I call getting rich.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Should I buy more Rolls-Royce shares near 500p?

This investor is wondering whether to buy more Rolls-Royce shares this summer or to just stick with those he already…

Read more »

Investing Articles

After its big fall, is the National Grid share price dirt cheap now?

The National Grid share price fell sharply in reponse to new rights issue plans. But is it an even better…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Starting in June, I’d invest £1,000 a month to aim for a £102,000 second income in retirement

This author highlights a less well-known FTSE 100 stock that could help his portfolio generate a very big second income…

Read more »

Investing Articles

Down 47% in 5 years, is the IAG share price due a bounce?

Many companies in the travel sector have seen fierce rallies since 2020. But with the IAG share price still down…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

Despite its drop, I reckon this is one of the best FTSE 100 stocks to buy and hold!

The FTSE 100 has been climbing in 2024 but this favourite of our writer's has been falling. Despite this, she’s…

Read more »

Investing Articles

AI stocks vs EV shares; which is the best sector for me to invest in?

Jon Smith considers the recent rally in AI stocks and weighs up whether to allocate more money there versus EV…

Read more »

A graph made of neon tubes in a room
Investing Articles

Do Greggs shares have even more growth ahead?

Greggs shares have seen some solid growth in the last few months, as the economy shows positive signs. But is…

Read more »

Investing For Beginners

How I’d aim to grow my Stocks & Shares ISA from £20k to £1m

Jon Smith explains how diversification and focusing on sectors for the future can help grow his Stocks and Shares ISA.

Read more »