The Stock Exchange

Stocks and shares, portfolio, options, capital gains tax, certificate, dividend...does anyone actually understand all of this stuff?

Some people obviously do but I would liken wheeling and dealing on the stock exchange to the wheeling and dealing of the antiques trade. The key to making money is to know what can be bought cheap and is selling well, to hold on to your investment until the market is right and to ride your luck that favourable conditions are just around the corner.

To the untrained eye I think that the antiques trade is much easier even if the experts on Bargain Hunt hardly ever make a profit. The stock exchange never really makes any sense to me.

As I understand it the FTSE 100 is the total share price for the top 100 companies trading on LSE, London Stock Exchange. The share price of the FTSE 100 depends upon a wide variety of different variables including: company news; government policy; the European debt crisis; economic growth in China to name a few. The highest it has ever been is 6,732 pence. That occurred in June 2007, in March 2009 it crashed all the way down to 3,754. Today apparently buoyed by the Christmas sales figures of supermarket chains it has reached a two year high of 6,101, this all seems good but who knows what will happen tomorrow it only takes some bad news from a country like Spain or Greece and the share price will plummet again.

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So today, how could you have made money?

Well, the company that increased its share price by the biggest percentage today was a manufacturer of building products called Sig. It increased its share price by a whopping 6.3%. £50,000 investment bought on yesterday's closing share price would have been worth £53,150 today. Just over £3K not bad. This was on the back of a strong trading statement issued today.

However a £50,000 investment in the African Barrack Gold would at close today only have been worth £47,960. This was due to a takeover bid for this Tanzanian mining company by a Chinese investor falling through earlier in the week. On the 2nd January ABG's shares were at 451p today they stand at 364p. Now that would have been a poor investment!

If you are thinking about investing in shares - good luck, may be it would be worth buying an Edwardian dining table instead.

http://www.hamiltonbilliards.com/images/products/4097_main.jpg

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