Four ways of investing in the UK economy

UKFour ways of investing in the UK economy

The UK economy has ridden through stormy weather in recent years with impacts of the COVID-19 pandemic, Brexit and the energy crisis leading to tough conditions for homegrown businesses and investors.

But there have been recent signs of recovery and the UK’s reputation and expertise across a wide variety of sectors remain strong pulling points as global businesses seek locations to perform key operations.

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If you’re looking to take a slice of the pie in UK businesses, here are four ways that you can gain entry into this famed and historic market. 

Investing directly in UK-based shares

Quite simply, find some publicly traded UK companies and purchase shares in them via a reliable trading platform. Directly investing comes with many added benefits such as the potential to earn shareholder dividends and bonus payments.

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Of course, if you invest smartly, you may also be able to make a profit by selling your shares if they have risen in value!

A benefit of trading listed companies is the transparency that they have to operate within, so you should always have sight of financial reports and associated news reports – making fundamental analysis much easier.

Trading Indices 

Trading an index allows you to take a wider snapshot of the UK economy and trade it according to how you believe the market will move.

Indices such as the FTSE 100 and FTSE 500 feature the leading companies operating in the UK and often rise and fall in price according to how the economy looks overall.

Some other indices may focus on a specific sector such as the banking or energy sectors. 

Investing in small businesses

Napoleon is credited with labelling the UK a ‘Nation of Shopkeepers’. It may not have necessarily been intended as a compliment, but Britain is fiercely proud of its reputation as a small-business powerhouse. 

Small-Medium Enterprises (SMEs) make up 99.9% of the British business landscape, providing the backbone of the national economy. 

The vast majority of these small businesses are privately owned, so investment will be made directly with business owners and boards. This can remove some of the red tape associated with purchasing publicly traded shares but may also provide challenges if you wish to alter the direction of the business operations.

Crowdfunding for startups

Tech hubs like London, Manchester and Leeds are home to many startups in emerging industries, which the UK remains at the forefront of.

Many startup companies may be based around a great idea – while lacking the business acumen or finance to get off the ground in the first place.

Crowdfunders provide an opportunity for these startups to get connected with investors and business experts, and this could also provide you with an entry point to the UK market with potential high yields.

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