The History of Penny Shares

The History of Penny Shares

The Foundations of the London Stock Exchange.
The history of penny shares and stock is firmly rooted in the origins of the stock market which itself goes back two hundred years, its origins were first laid in Europe even before the industrial revolution which occurred four hundred years ago.

With industry came huge business; with these businesses came established merchants that wanted to invest their wealth in a successful company where they knew their investment would not only be safe but generate them a financial profit. So it began that individual merchants would bring together their funds to become partners in a business, each contribution was then represented as a unit. It was this practice that paved the way for the stock market as we know it today.

With these foundations laid the market began to give rise to new and exciting jobs such as part of investment banks that had their own brokers as well as in house investment advisers and finance managers. As a British colony it was Kenya that began working with shares in the 1920’s, however at this point in time there were no rules or regulations in place to administer stock market dealings and activities. It was simply a ‘Gentlemen’s agreement’ that held the trading in place as people starting to involve themselves in the stock market as a form of income on the side of their normal employment. The people most involved in these dealings were accountants and people with wealth such as lawyers and estate agents.

In 1800 the first ever formal exchange was created in Philadelphia, along with New York these were the first places to regulate the official trading rules. It wasn’t until the early 1900’s that people started to make vast fortunes from investing on the market, at the time it was considered to be completely risk free as up until then no great crashes had been documented. Unfortunately the market suffered its first great loss after the infamous crash that occurred in 1929 which consequently lead to the ‘Great Depression’.

Investing in the market even with small amounts as with penny shares and stock is even in the modern era, a risky venture as the market is still as volatile as ever but keeping informed of the current stock climate and being aware of histories crashes and successes should give anyone who’s willing to do their research a good understanding of the potential gains and losses of being involved in the stock market today.

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