The Telecom Eireann share offer and the massive publicity surrounding the event have whetted public interest in share ownership. The flotation has helped demystify the process of buying shares and up to 700,000 people are expected to become share owners for the first time as a result.

Many people in the Republic are relative newcomers to the stock market, having become share owners as a result of the demutualisation of the Irish Permanent and First National building societies and Norwich Union, the flotation of Irish Life or through share option/bonus schemes operated by their employers. While many people already have some indirect involvement in the stock market through the investment of most employee pension funds in shares, owning shares of your own means that you will have to make decisions on when to buy and when to sell. And you will need to know how to go about buying and selling, the cost of dealing on the market and the tax implications of holding shares and of dealing in shares.

Why buy shares: In the current low interest rate environment people with savings are seeing a very poor return on their accounts, so they are looking for alternative investments. While shares are not a risk-free investment and can be volatile in the short term, they have, over the years, consistently outperformed other forms of investment.

Goodbody Stockbrokers has quoted the following performances for a lump sum of £1,000 (€1,270) invested for the five years to 1998:

Cash: £1,324

Government bonds: £1,555

Property: £2,715

Irish shares: £3,055

Anyone considering an investment in shares should be aware that share prices can fall as well as rise. The general advice given to potential investors is that they should never invest money in shares if they cannot afford to lose some or all of that money, especially where the investment is in the more volatile areas such as oil exploration or high-tech companies.

Companies on the stock market are usually divided into "blue chips", "second liners" and "high risk". Blue chips are the largest companies on the market - companies such as AIB, Bank of Ireland, Kerry Group and CRH. They are generally seen as sound long-term investments. Second liners are the smaller companies - generally any company valued (with a market capitalisation) at under €1 billion (£790 million). The high-risk category comprises the more volatile companies such as mineral exploration and high-tech companies.

For a shareholder the potential gains come in the form of dividend income and increases in the share price.

When to buy and sell: This is the key judgement call for any shareholder. It is very difficult for any individual shareholder to either buy at the very bottom or sell at the very top price.

But it is important that shareholders ensure that they keep themselves well informed about the company they have invested in, the markets and geographic areas it operates in and any economic, regulatory or political issues which may influence the financial performance of the company. Most stockbrokers produce reports on the economy, on sectoral developments and on specific companies which potential investors can request.

Reading the financial pages of your newspaper, accessing the Internet for information about the company, its markets and the sector it operates in, reading the company's annual report and specialist publications on sectors, technical developments and markets will help to keep an investor informed. Investors should monitor the price of their shares regularly - the list of companies quoted on the Irish Stock Exchange and the prices at which the shares have traded are published every day in the newspapers. Investors should set some general guidelines for themselves to help them make the sell decision: when a share is bought an investor should set some target for the capital appreciation, or increase in the share price, they want to achieve. If this price is reached they should assess the situation again to see if the time has come to sell the shares and invest in other shares. Generally, investors are advised to sell as a price is on the way up, since it will be almost impossible to sell at the very top of the market. But the key is judging at which point on a rising scale they should sell.

A decision to buy should follow a careful assessment of the company including its financial performance and outlook, its markets and the sector it operates in. Potential investors should examine the share price performance over a period in the newspapers.

How to buy and sell: Shares have to be bought and sold through a stockbroker. Potential investors will find a list of stockbrokers in the Golden Pages. They should contact a number of brokers to establish which set of terms and conditions best suit their requirements - this decision will be influenced by how regularly they intend to deal and what size of deals they are likely to make. Buying and selling has been made more accessible for investors in recent years since the banks have started to take buy/sell orders from account holders over the counter. These orders are then passed on to the stockbroking subsidiaries of the banks for execution.

To buy: An investor can place an order with a broker. Generally investors will have decided how much they want to invest, according to brokers. However, it would be unusual for a broker to accept a buy order from an investor who is not known to the broker.

One broker explained that normally when an investor approaches his firm, a meeting with an investment adviser will be arranged to establish what sort of investment strategy would best suit the investor. Is a high-risk/ high-reward potential strategy suitable to the investor's circumstances or would a low-risk strategy be more suitable?

Then an investor will be asked to fill out a form which will be used to open an account with the stockbroker. Some identification is required to comply with the anti-money laundering legislation, such as a passport or driving licence. Then the investor will be required to lodge money to the account before the broker will start to deal on their behalf. Once an account has been opened the investor can continue to place buy orders. An investor who has an account will be given five days from the day the shares are bought to pay for them. Some investors set the price at which they wish to buy while others set the amount they wish to spend when placing buy orders with stockbrokers.

To sell: Investors can give a sell order to a broker. They can either set the price at which they are prepared to sell, set a minimum price or give an open order to sell that day at the price in the market. Often investors will take advice from the dealers involved when they place an order. Shareholders will be required to produce their share certificates which constitute proof of ownership, unless their shareholding is held in an electronic nominee account. Payment for the shares will come from their broker five days after the sale has been made.

Cost of buying and selling: Stockbrokers' charges vary quite widely and investors should check what charges are involved before they buy or sell. Calls to some stockbrokers this week showed the following range of charges: Fexco offers the lowest-cost services with a minimum charge of £12.50 per deal. It charges 1 per cent on the first £5,000 and 0.35 per cent on the balance of the value of shares bought or sold.

Therefore if you buy or sell shares for £1,000 or £1,250 the charge will be £12.50, and if you raise £1,500, the charge will be £15.

At BCP Stockbrokers the minimum commission charge is €45 (£35), with 1.5 per cent commission on deals up to €20,000 (£15,751), 1 per cent on the next €20,000 and 0.5 per cent on the balance. BCP also has a settlement charge per deal of €15 (£12). Campbell O'Connor charges a minimum of £20 on the first £1,300, 1.5 per cent on amounts between £1,300 and £7,000, 0.55 per cent on amounts between £7,000 and £15,000 and 0.50 per cent on amounts over £15,000. At Dolmen Butler and Briscoe the commission charge is 1.65 per cent on the first £10,000, 1 per cent on the next £10,000 and 0.5 per cent on amounts over £20,000. Goodbody, the stockbroking subsidiary of AIB, charges 1.65 per cent commission on deals up to £10,000, 1 per cent on the next £20,000 and 0.5 per cent on amounts over £30,000. Its minimum charge is £40.

All of the brokers emphasised that they will be announcing special low-cost deals in coming days for investors who want to sell Telecom shares.

In addition to brokers' charges investors have to pay Government stamp duty when they buy shares. The stamp duty is 1 per cent on the value of Irish shares, 0.5 per cent on the value of British shares. There is no stamp duty on US shares.

Tax implications: Owning shares is the same as owning a tiny slice of a company. As an owner you are entitled to a share in the profits of the company. What you will get will come in the form of a dividend, the size of which will depend on the proportion of the profits after tax that the board of the company decides to pay out to shareholders and the number of shares you own. A dividend per share will be declared by the company and shareholders generally get dividend cheques twice a year - at the half-year stage and the end of the financial year.

Getting a dividend payment has income tax implications - a dividend is income, must be declared on your income tax return and is taxable as income at your marginal tax rate.

Buying shares does not carry any tax implications, but selling may. Selling shares could give rise to Capital Gains Tax (CGT) if you make a profit on the sale. Your liability to CGT is calculated by taking the cost of the shares, applying a Revenue index based on the year of purchase to allow for inflation, and subtracting this from the proceeds from the sale of the shares. This amount is your capital gain.

In any one tax year (under current rules) an individual is allowed to make a capital gain of £1,000 before he/she become liable for CGT. So if you sold shares for £5,000 which you had purchased for £4,000 (adjusted for inflation) you would have a gain of £1,000 and no CGT liability. But if you sold the same shares for £6,000, you would have a gain of £2,000 and be liable for CGT on £1,000 (£2,000 less your annual exemption of £1,000) at 20 per cent, giving you a tax bill of £200.

To get the best result from direct share ownership investors must be prepared to take a more pro-active interest in the market than would be required if they take indirect ownership of shares through investment in a managed fund or pension plan.