How buying investments works

So here we are…you’ve browsed the investment range, read all the details, done your own research, and chosen your investments. ✅ Great, now for that ‘investing’ part! 🥳 But how does it all work? Well, you’re in the right place – here’s where you’ll find out, with your guide to buying investments with Dodl.

In this article we’ll run through how you place an order to buy an investment, or set it up as a monthly one (for those after the routine of regular investing), then we’ll go behind the scenes and explain how your order moves from confirmed to completed. The aim of this article is for you to know exactly what’s happening before it even happens! 🔮 Right, let’s get to it!

 

📣 If you’ve not yet chosen your investments and need a few pointers on how to start building your investment portfolio, check out the getting started series before heading back this way when you’re good and ready. And remember, because Dodl doesn’t offer advice, if you’re ever unsure about choosing your own investments, it’s best to talk to a financial adviser who can help you with this.

Before you buy ☝ 

Just a few points to check before you place an order or set up a monthly investment. You’ll need to know:

📄 The investment’s details and charges - make sure you’ve understood any initial and ongoing investment charges you'll get. And you've read and understood the key investor information document (KIID) for funds. KIIDs are produced by the fund managers and give you important info about the fund – including its charges, risk rating, and underlying investments.

🔔The risks of investing - your investments can go up and down in value, and you could get back less than you put in.

📅 How regularly you’re investing - is it a one-off or are you setting it up as a monthly investment?

💰 How much you’re investing - make sure you have the amount you plan to invest available in your Dodl account, plus a little extra for the charges. If not, you’ll need to go ahead and add some cash first.

All good? Then it’s time to place your order! Or set up your handy monthly investment if you want to invest the same amount automatically every month.

Placing your order 

Find your chosen investment first by heading to the ‘invest’ tab. Once you’ve located your future investment’s info page and you’ve read and are happy with its details, just go ahead and tap that ruby red Invest button. 👌 You’re then met by the screen where you choose the account you’d like to buy your investment in and how much you’d like to invest.

For shares, you’ll also be shown its latest share price at this point. You’ll need to make sure you can invest enough to buy at least one share, plus a little extra for stamp duty (UK shares) or the foreign exchange charge (US shares). Buying a fraction of a share isn’t an option with Dodl right now, but let the team know if you’d like to see this in future.

Then you’ll move on to review your investment. The final check that you’re happy with your order details, including: the charges – that’s the Dodl account charge and the investment charges too, like ongoing charges and transaction costs for funds and stamp duty and foreign exchange charges for shares; and the key investor information for funds.

If your order looks good, go ahead and submit it and your work here is done – your order is confirmed! 🎇 At this point you’ll see your order sitting pretty in ‘your account activity’. It’ll say ‘pending’ for now until it’s processed after the next order cut-off. Once it’s been processed, you’ll be able to view your order’s contract note. This is a receipt-like document which tells you the details of your purchase – including the price and time your investment was bought at.

 

⏰ Note the time: 3pm is the daily cut-off time for orders to be in by and processed the same day. So if you place your order before 3pm on a normal working day, it'll be processed that same day. If you place your order after 3pm or on a weekend/bank hol, your order will be processed after the cut-off on the next working day.

Or setting up a monthly investment 📅 

Every investment in the Dodl investment range can be set up as a monthly investment, which you automatically buy more of each and every month. You’d do this by choosing ‘Invest monthly’ rather than ‘Invest’ when you’re on your chosen investment’s info. 

The pros of investing monthly are covered in the getting into the investing habit article, but in case you missed it here are the headlines: 

✔ It’s easy and automated – set it up, sit back and relax! 

✔ Your investing routine – does away with worries about ‘timing the market’! 

✔ Can be beneficial when the market is very up and down by averaging the price you buy at. 

So how does it work? 

All the same things apply to setting up a monthly investment as placing a one-off order to buy an investment: check the details before you buy, choose the account and amount for your investment, then review this to make sure you’re happy.

But there is one key difference: you’re giving Dodl an order to be placed recurrently, every month on or around the 10th of the month (this is called the ‘investment day’ by the way!). So the amount you’re investing will be used to buy the investment initially, then more of it every month after.

Once you’ve set up your monthly investment, your job here is done! 💅 Dodl will go through the motions and buy more of your investment automatically every month, according to your instructions. And don’t worry if you need to edit or cancel your monthly investment for any reason – just head to ‘Invest monthly’ in your account, where you can do this right up until the investment day.

 

Order confirmed ➡ Order completed 

There’ll be a short delay between the moment your order is confirmed and when your investment is completely yours, sat in your account. That’s because buying investments isn’t instantaneous and your order has to be processed, sent to the market to be dealt, then come back to you with the goods.

Because Dodl likes to keep things as simple as possible, we bulk orders to process all together once a day, after the daily cut-off time. 🕘 That’s why the cut-off time exists and why we may ask for just a little patience when we’re processing your order – it’s on its way, promise!

Bulk orders explained 📦

Let’s use a quick analogy for this. Say you order some fancy clothes from a brand which processes its orders in bulk once a day (it’s that fancy!). You’ve ordered a purple poncho (nod to the ‘00s 🤘), and so too have 10 others – some have even ordered two because they like it that much! All of these orders are bulked together, sorted and processed as one at the warehouse, before the individual jumpers are sent their separate ways to their new homes.

Just like our analogy, with Dodl after the clock strikes 3pm (assuming it’s a working day), the order you’ve just placed will be processed. At this stage it’s bulked with all other orders of the same type and sent to the market to be dealt. Once they’ve been dealt, your part of the bulk order (your new investment) is sent to your account and the order is complete!

Though all orders are bulked, different types of investments (shares & exchange traded funds vs funds) diverge a little on how they are processed and how quickly they complete. 👇

For shares and exchange traded funds (ETFs)

Once your order's been processed after the 3pm cut-off, it’ll usually be dealt with right away. That's because shares and exchange traded funds trade all day on the stock market.

You’ll get your contract note shortly after this, confirming it’s all gone through and that’s it - your order is complete! As a rough guide, it'll typically take 1-2 working days to complete your share or ETF orders and for them to appear in your investments.

Side note 📝: whole shares only!   

If, by the time your order to buy shares is processed, the share price has increased and your investment amount is no longer enough to buy at least one, your order won’t go through (sorry!) – you’ll be sent a message about this if it happens. And because it’s only whole shares Dodl deals in, if you invest £50 in a company which has a share price of £15, you’ll get 3 shares and that £5 ‘change’ back in your Dodl account to be used another day. Buying funds isn’t like this – you can usually buy fractions of fund units with any amount of cash.

For funds

This stage takes a little longer for funds, usually 3-4 working days in total. That’s because they don’t trade all day on a stock exchange like shares and ETFs, instead they are valued, and deals are taken for them, just once a day (usually around midday).

Once processed though, just like for shares/ETFs, you’ll be sent a contract note confirming the date, time and price your investment is bought at. On your fund contract note you’ll also see something called the ‘settlement date’. This is the date your purchase should complete (it’s usually 2-3 working days later) and on that day your investment should also arrive in your account.

Investment bought ✅

Now your investment is nicely settled into your account, you can check back on it every now and again to see how it’s doing. Do just remember, the value of your investments can go down as well as up, and they should generally be held for the long term (that’s 5+ years) to give them the best chance to grow.

Your turn? 😛 

Well that just about covers it! You’ve now seen under the bonnet of buying investments with Dodl. It’s a bit to take in but that’s because we think it’s super important you understand exactly how this most important of processes works – so you know why an investment doesn’t just appear in your account or exactly what that contract-note thingy is!

Once you’ve digested this info, and you’re feeling ready, go ahead and place your order. 👇 And, as always, if there’s anything you need just a little more detail on chat to one of our lovely team.  

 

Buy an investment

 

🔔 Remember, investing carries risk and nothing in this article should be taken as advice – Dodl doesn’t give advice, but we do hope the info is helpful.