One beginner’s trap it’s easy to fall into

WHETHER you’re British, American or French, home bias is likely to come into play when you’re investing. But, whatever your nationality, you can fall foul of stock market skews towards particular sectors.

In the UK, the stock market is dominated by energy, commodity and financial companies such as banks and insurance firms.

Across the Channel, European stock markets are peppered with pharmaceutical companies, including the likes of Roche and Bayer while the Japanese stock market is the gateway to emerging Asia and futuristic sectors such as robotics.

The US also has more than its fair share of technology companies listed on its stock market – the likes of Alphabet, Apple and Microsoft – as well as many high-quality global consumer brands.

It may feel you need to pick a country to gain decent exposure to a specific sector. However, the UK is proposing reforms that could change the make-up of its stock market. Hargreaves Lansdown’s Susannah Streeter says: ‘The Government is keen to change the stock market rules to make it more attractive to list companies.

‘For example, fintech company Wise recently listed on the London Stock Exchange, with the potential for significant growth.

‘By making it easier for companies to list here, we could see a wider mix of companies make up the UK stock market.’