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UK Stock Market Guide: How to Invest and Everything You Should Know

According to London Stock Exchange Group data, 272.6 million trades were made in 2018 at an eye-watering total trade value of £1.4 trillion. That equates to an average of 750,000 trades per day.

Every time a share is bought or sold the London Stock Exchange have to carry out the transaction and record the details. Historically, this process was done manually using the postal system to send and receive cheques and paper share certificates.

Thankfully technology has moved on and just about every transaction is completed electronically now. This helps make the process much quicker. The London Stock Exchange settle most transactions within three working days. For an investor using an online stockbroker during trading hours, they will see the transaction completed almost instantly in most cases.

What do you need to know about the London Stock Exchange?

You could be forgiven for thinking that the stock market was just one big market of companies. However, there are actually two markets that make up the UK stock market. We have the Main Market and the Alternative Investment Market, commonly known as AIM.

There are approximately 1200 companies listed on the Main Market with a total share value of £3.7 trillion. The Main Market contains larger companies. Then there are around 900 companies listed on the AIM with a total market value of over £70 billion. Companies listed on AIM are typically smaller, earlier stage companies. The figures will fluctuate a little as companies enter and exit the markets.

Shares in both the Main Market and AIM are bought and sold in the same way on the London Stock Exchange. This is usually done via an online stockbroker.

How to invest in London Stock Exchange?

The lure of money takes us to maximum heights. Even if we are afraid of height at first, the higher we go the more accustomed to it we become. However, it varies from one individual to other as to how much they can give just to make money. While the notion of spending seems fine, many business elites or money makers are lured in to make more money by trading in stock markets.

The idea seems promising but is not an easy job especially when you are a newbie in this game. If you are one of the people who want to invest in stock markets, then below points are put in order to discipline you on some basic knowledge.

1. Invest in a Business you understand:
As they say, knowledge is absolute power. If a person does not know about a certain thing and even then opts to invest in it, chances are most likely he will receive backlash. Smartness is when you invest in a business you are sure about and understand. Most investments receive loss due to the reason that we invest in a foreign business just because it is top-rated and basically because of greed. It is downright stupid and you should avoid it.

2. Start small:
Always start with a small amount to check the temperature of the water. Starting big will most likely result in loss and it’s no brainer that since you have no experience in a certain field, you all might and high and do the most basic mistakes. Start small then gradually make your way towards the bigger investments when you are experienced enough.

3. Set aside surplus amounts:
Never invest with the total amount you possess. The chances are that if it turns out a loss, you won’t be able to recover it. So, invest with surplus amounts if you have or don’t do it.

4. Control your emotions:
Emotions play a key role in everything that you do but it is the most dangerous when investing in a business. Your emotions make you take stupid decisions that you regret later. Set aside your emotions when you do investments.

5. Avoid leverage:
Leverage in this era is not the wisest of ideas. The person from which you take leverage to do investments haunts you throughout your life. Never take leverage from anybody be it your dearest ones. The other setback that it gives you is that you fall prey to every plot or scheme of that other person. Apply better safe than the sorry rule here and do not under any circumstance take leverage from anybody.