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04 Nov | Investing in Shares on the LSE

Don’t gamble when it comes to picking shares on the London Stock Exchange!

After receiving my commerce degree, I was ready to take on the world. I believed that I was sufficiently equipped with the requisite financial sense to make smart investment decisions, regardless of the market volatility. Squarely in my sites was the London Stock Exchange (LSE). But at some level, I was a little scared. There appears to be a whole lot of hullabaloo about investing in shares on the LSE. True, insight, knowledge, common sense and good fortune are required, but it’s not an impossible endeavour. Equities bestow upon their owner partial ownership of a company. You’re essentially purchasing part of the business that you’re investing in. Your goal of course is to yield a profit at some point in the future. The stock exchange should be perceived as a long- term investment, perhaps even a golden nest egg for retirement purposes. Fortunately, investments in the LSE can be tailored to personal preferences, timeframes and expectations.

Investment Fundamentals for the London Stock Exchange

There are many misconceptions about investing on the stock exchange. Some folks tend to get bogged down by acronyms such as PLC and whether that means the company is listed on the stock exchange or not. The point of the matter is that when any company on the LSE wants to raise capital, it puts shares up for sale. Of course there are a wide range of regulatory conditions that must be satisfied prior to a company being listed on the LSE. Once a company has listed and you have purchased shares in the company, you actually become a part owner in the company. All public limited companies are required to hold annual meetings where you, as a shareholder, can vote
on a range of different topics. Typically, stockbrokers purchase/sell shares on behalf of their clients – the investors. Today, most all of this work can easily be done over the Internet.

Seizing Profitable Opportunities

As an example of where to begin, you may wish to consider that the USA has legalized online gambling in 3 states. These include New Jersey, Nevada and Delaware. Many online casino companies that have already established themselves in the UK, on the
LSE – such as the Betfair Group , 888 Holdings PLC and others will be providing their expertise and gaming platforms, in concert with US companies this month. The market for online gambling in the USA is set to take off and deliver windfall returns in the medium to long term for UK-based online gambling companies. Perspicacious investors who are aware of these major developments will be extremely eager to cash in on the action before the shares become too costly.

As an example, Betfair Group PLC is currently listed on the LSE at a bid price of 988. The company has shown strong growth since April 2013 and all signs are pointing towards continued growth and prosperity well into to 2014 and beyond. Similarly, 888 Holdings PLC has enjoyed surging growth since February of 2013. There have been a few dips in performance, but these have been offset by large and consistent returns. The current bid price for 888 holdings PLC shares was 157.30 at the close of market on 3 November 2013. 888 holdings PLC will be working in concert with Caesar’s Interactive Entertainment to provide New Jersey land-based casinos with online gaming software.

This may well be a solid long-term investment strategy for people looking to dabble in the London Stock Exchange.

This article was contributed by Brett Chatz for http://spreadbettingreview.co.uk/

Staff Writer