A voyage of discovery

STOCK MARKET INVESTMENT: here and on pages 20 to 21 we look at the ups and downs of using your hard-earned cash to buy shares

These DAys, Deptford Creek is an almost deserted backwater. But 400 years ago, it was one of the most important ports on the Thames. In 1553, when Sir Hugh Willoughby led his three small ships onto the river, he was not simply embarking on a voyage of discovery, he was laying the foundations of the modern business world.

Uniquely for the time, his expedition was financed by a group of businessmen who had banded together to form the Mysterie and Companie of Merchant Adventurers for the Discoverie of Regions, Dominions, Islands and Places Unknown.

The expedition was both a tragedy and a triumph. Within a year Willoughby and his crew were dead - caught in the Arctic ice as they sought the North-east Passage around Russia to China. But another captain, Richard Chancellor, survived, travelled to Moscow and negotiated Britain's first free-trade treaty with the Russian Tsar, Ivan the Terrible.

The Muscovy Company was the first business in Britain with a modern company structure that separated ownership from management. The merchants each subscribed pounds 25 for a share of the business but did not get involved in day-to-day operations, which were the responsibility of the governor and his deputies, or as we would call them, the board of directors.

Most companies today are engaged in less exciting activity than discovering unknown lands but the basic structure remains the same: ownership is in shares that can be traded freely and is separate from the management of the business.

About 9 million people in Britain own shares, either investing in them directly, or with indirect shareholdings through pension funds, personal equity plans or unit and investment trusts. The attraction is simple: over the long term, money invested in shares will be worth much more than if it were kept in a savings account, particularly at the present level of interest rates. Yet many investors continue to shun the stock market.

That is often because of the perception that investment in the stock market is risky, difficult and only for rich folk in the City. The truth is rather different.

When you buy shares you hope to make money in two ways: a regular income from the dividend and capital growth, by which the shares will ultimately sell for a higher price than you paid in the first place.

But it is important to know that dividends do not always increase from year to year. If a company's profits take a nosedive, the payout to shareholders may be cut or even passed altogether, although this is rare.

Movement in share prices is influenced by many factors (the world economy, interest rates, political developments at home and abroad) not just individual company performance. In recent months, for example, share prices on the London Stock Exchange have been hitting record highs but many commentators and professional investors think this trend is unlikely to continue and that a downturn is likely.

If you do not have a well-funded pension plan and some spare cash put away for unforeseen emergencies, do not even think about the stock market. But if you do have money to invest then you may want to consider investing in shares as a way to make it grow over the long term, say five or 10 years.

people And here is why...
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
voicesBy the man who has
Arsene Wenger tried to sign Eden Hazard
footballAfter 18 years with Arsenal, here are 18 things he has still never done as the Gunners' manager
Life and Style
The new Windows 10 Start Menu
Arts and Entertainment
Kristen Stewart and Robert Pattinson star in The Twilight Saga but will not be starring in the new Facebook mini-movies
tvKristen Stewart and Stephenie Meyer will choose female directrs
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
books(and not a Buzzfeed article in sight)
ebooksAn unforgettable anthology of contemporary reportage
William Hague
people... when he called Hague the county's greatest
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
Arts and Entertainment
Twerking girls: Miley Cyrus's video for 'Wrecking Ball'
arts + ents
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?