The Antwerp Bourse is said to be the oldest stock exchange in the world, boasting a founding date in 1460. London, however, provides the longest recorded history of all the world's stock markets, allowing us to look back over 300 years to see how that market has behaved since1700.
Three indices are used in the United Kingdom. The Financial Times 30 Industrials presents the longest daily history for British stocks; however, the index includes only 30 stocks, and it is more and more less-representative of the market as a whole. The FTSE All-Share provides a more representative indicator of British stocks, but provides daily data only back to the 1960s. Prior to these, other broad indices of British stocks have been used to supply data stretching back to 1700.
Britain suffered two major market crashes before World War I. The South Sea Bubble crash is the most infamous and occurred in the 1720s. One hundred years later, the post-Napoleonic War boom led to massive speculation in Latin American mines and a second stock-market bubble.
These two declines were worse than those occurring during the Great Depression (1929-1932) and World War II (1936-1940). The 1972-1974 bear market was the most dire bear market of the 20th century for the United Kingdom, as OPEC, runaway inflation, and political problems destroyed investor confidence. Since this bear market took place during a period of high inflation, the 77% real decline comes close to matching the US bear market of the Great Depression.
The London Stock Exchange makes possible millions of trades each year from investors around the world. The UK stock market is seen by experts as a bridge between the European Union and North America. As a competitor in international finance and diplomacy, the UK's exchange is considered quite a sound place to invest money.
Stock trading in the UK has become popular with small investors to not only save for retirement but in some cases to earn a living. Others have succeeded in making their fortunes that way. Stock trading used to be the province of big companies and individuals with high net worth, but that began changing with the introduction of reduced broker fees and more financial acumen among financial-investment novices.
Notably, the best-known UK stock markets are the blue-chip FTSE 100, the mid-cap FTSE 250, and the more lightly regulated Alternative Investment Market (AIM), which is largely for smaller, more speculative stocks.