It all started back in 1611 in Amsterdam but then it could be 1602, no one’s quite sure. If you listen to the Belgians they will tell you that Antwerp was the main trading centre back in the 1400’s. Who knows but let’s just say the modern day Stock Market was founded in 1611 in Amsterdam in The Netherlands.

The Dutch east India company was the first company to be publicly traded on a stock exchange as the company’s owners sought to raise capital to pay for the voyages in exchange for a share of the profits of the goods that were brought back.

The French and British East India trading companies followed suit and in London shares were traded in coffee houses such as Jonathon’s coffee house in 1680. However unscrupulous dealings lead to the government banning such activities. The official London Stock exchange wasn’t opened until1801.

In 1812 the 1st “Rule Book” was published. Issues such as settlements and defaults were now regulated. Oddly enough it banned letting off fireworks and footballs. I wonder why?

Many western countries followed suit with the New York Stock Exchange, established in 1792, formally organising itself in 1817 trading predominantly in government bonds. Even though the US had a much larger domestic market and huge natural reserves, it was the London Stock Market that was the major exchange in the world up until the beginning of WW1. Whole new industries such as electricity, railroads and water companies sprang up all clamouring for capital injections to grow their businesses. However, company law at that time was flakey to say the least; Until 1900, for instance, companies were not required to have their accounts audited and it wasn’t until 1908 that companies were required to file the accounts for public scrutiny.

Laws of the Stock Market

In order for a market to function, everybody in it, buyers and sellers have to be comfortable trading. As is the nature of the human being there will always be some dastardly skulduggery going on somewhere, even downright fraudulent behaviour is common place so Stock Market’s all over the world started introducing rules and regulations to protect the investor from such heinous activity. In the early 20th century, for instance, companies that wanted a listing on the exchange had to publicly advertise their prospectus. In addition 2/3rds of their shares had to be made available to the public and its’ corporate constitution had to conform to the exchange’s rules and regulations. (source)

Todays rules and regulations

Those rules and regulations as laid out back then have grown into a safety net for investors to allow us to be confident that our interests are being extremely well looked after and that the stock market is our friend not our foe. We are not going to lose our shirt as soon as we place our first investment. I’m going to show you that investing in the stock market is fun, rewarding and engaging and is the key to your Financial Freedom. I hope by now you are looking into ways to improve your money management, have a desire to change your life to one of freedom and are intrigued to find out how it’s possible to be a successful stock market investor without any corporate training, masters degrees or an IQ of 150. In my next blog, Stock Market investing- The Beginning, I will show you that with a simple strategy, patience and temperament you can build a portfolio to change your life forever.