I have posted charts showing annual stock market and bond market returns for various indices in recent years for the time periods from 1980-2006 , 1980-2007 , 1980-2008 , 1980-2009 , 1980-2010 , 1980-2011 , and 1980-2012 Shown below is an updated chart including returns from 2013 as shown below (click on the image for a larger view). The London Stock Exchange, arguably now the more well-known exchange, did not come into being until over a century later and it began in a rather surprising place. They made local coffee shops their base and the most popular of these shops for the stock brokers was Jonathan’s Coffee House, located in Change Alley. Using this list, that was known as ‘the Course of the Exchange and other things’, the stock brokers could hold auctions.
A man called John Casting took the initiative and began to list the prices of commodities, provisions and exchange rates, this list was published a few times a week and only for a few days at a time. The popularity of these auction soon grew, more stock brokers began to take part and new companies put their stocks and shares up for sale. Though the stock brokers were initially forced to find a new location for their meetings when they were banned from the Royal Exchange, there were also benefits of not going through the official Royal Exchange channels.
The Royal Exchange was the first stock exchange in England but many brokers continued to frequent the coffee shops instead of the Exchange even after they were allowed to return. Stock brokers continued to visit the coffee shops to buy, sell and trade for many more years and the coffee houses were particularly popular after the Seven Years War The situation became more formal when 150 stock brokers, who had been meeting at Jonathan’s Coffee House, decided to start a more official organisation. It was a popular move and the building became unofficially known as ‘The Stock Exchange’.
Initially brokers only had to pay an entrance fee in order to take part but after several cases of fraud, the Stock Exchange introduced annual membership fees in 1801. The introduction of membership fees led the organisation to become a regulated exchange – the London Stock Exchange. Since then the London Stock Exchange has been an important centre for all things related to stocks, shares and investment. Though the London Stock Exchange was popular with stock-brokers and those with large amounts of funds at their disposal, it was not as easy for smaller investors to take part.
Other early investment trusts are still running today, such as the Witan Investment Trust, which was founded in 1909 to manage the funds of Lord Farringdon but has since become one of the largest trusts on the Stock Exchange. The London Stock Exchange has come a long way since the 17th century coffee houses and is highly important to the English financial system.