Here at LSEG, we believe financial literacy opens up options and opportunities. Whether it’s study and career choices now, or how to save and invest money later on in life, understanding how finance works can help build a better future for us all.
Below you’ll find a few videos, case studies and insights to give you a first glimpse into the world of finance.
If you have any questions, please contact Marguerite Herrington (marguerite.herrington@lseg.com)
Primary School Resources
Basics in financial literacy
Take a look at money
Exchange money abroad
Need versus want
What does a bank do
Animals in the world of finance
Unicorns, bears, stags, piggy banks and black swans - what have all these creatures got to do with your hard-earned cash? Well, far more than you would think at first glance. They are all beasts that appear in the global economic ecosystem. They pop up as warnings, messages, signals and useful analogies in order to help us navigate what can sometimes be a confusing, closed-off world.
Bear
Bears pop up a lot in business and nobody is quite clear on why they are such a feature of the financial landscape, though some claim it is because The London Stock Exchange was set up in the seventeenth century, a time when bearbaiting was a popular pastime.
Bear investors target vulnerable securities and try to make a profit from a decline in stock prices. Many believe it all goes back to the old bearskin traders and the idiom ‘to sell the bear’s skin before one has caught the bear’. This was when the middleman or ‘bearskin jobber’ would sell a skin at one price and then buy it cheaper from the trapper, pocketing the profit.
Bear market goes straight to the heart of the stock exchanges. Whilst the value of stocks generally rise and fall, at times they simply fall and fall. And if you have a fall of twenty per cent or a long-term decline of more than two months, this is when you have a Bear Market. It is the opposite of a Bull Market, some believe this pairing dates back to when bulls and bears were pitted against each other in staged fights. The bull would thrust its horns upwards, while the bear would swat down with its paws.
Extract credit is to Bear Markets and Beyond: A Bestiary of Business Terms by Dhruti Shah and Dominic Bailey (Portico). Illustrations by Dominic Bailey.
Bull
A Bull Market is the opposite of a Bear Market. Some believe the analogy originates from the bull-and-bear fights of the eighteenth century.
A bull attacks by thrusting its horns upwards, so when the price of shares on the stock market is rising, it’s a ‘bull market’.
In fact, anything that is traded (bonds, real estate, currencies and commodities), can be described as a bull market when the trend is upwards. The trajectory has to be fairly sustained so, typically, the rise in stock prices is ongoing and market confidence is high.
Extract credit is to Bear Markets and Beyond: A Bestiary of Business Terms by Dhruti Shah and Dominic Bailey (Portico). Illustrations by Dominic Bailey.
Pig
Pigs unfortunately have a reputation for being very greedy and so a Pig is any investor who gets so overexcited by the thought of profits that they lose sight of their original investment strategy for all the dollar signs in their eyes. Sadly, the dreamed-of gains rarely tumble into their laps. In fact, there is a saying on Wall Street: ‘Bulls make money, bears make money, pigs get slaughtered’.
You might have had a Piggy Bank in your childhood, for putting your spare change and pocket money in. In fact, the Piggy Bank has a very long history, going back to at least 1450. Before there were banks, people would stash their money at home in an earthenware pot called a ‘pygg’. This explains why potters in the nineteenth century fashioned Piggy Banks after this farmyard animal. Oink.
Extract credit is to Bear Markets and Beyond: A Bestiary of Business Terms by Dhruti Shah and Dominic Bailey (Portico). Illustrations by Dominic Bailey.
Swan
The former Wall Street trader, now scholar, statistician and essayist, Nassim Nicholas Taleb, came up with the famous motif of a Black Swan Event. Europeans once assumed all swans were white, until a black one was spotted in the southern hemisphere. Therefore, a Black Swan is a metaphor for an unpredictable high-impact event, such as the global financial crash of 2008. The term has proved so influential that it has created spin-off labels, see below.
As grey is a mix of both black and white, a Grey Swan Event is high-impact and deemed unlikely, and yet anticipated ‘to a certain degree’. The Japanese finance company Nomura issues a yearly list of Grey Swan events and has previously suggested the following; the Chinese economy adopting a floating currency and the phasing out of paper money (with developed countries taking the lead on this).
Extract credit is to Bear Markets and Beyond: A Bestiary of Business Terms by Dhruti Shah and Dominic Bailey (Portico). Illustrations by Dominic Bailey.
Stag
A Stag is an impatient investor. When a company goes public, it is listed on the stock exchange and shares are offered to be bought and sold. A Stag doesn’t hang around to see how things pan out as they’ll have bought shares prior to public trading and then sell them straight away. It’s a strategy that is no-nonsense and fast-moving.
A Stag likes hot deals and quick profits. Oh Bambi, is this what you’ll grow up to be?
Extract credit is to Bear Markets and Beyond: A Bestiary of Business Terms by Dhruti Shah and Dominic Bailey (Portico). Illustrations by Dominic Bailey.
Unicorn
A Unicorn is, of course, a magical creature and so it’s unsurprising that, in business, this name has been bestowed on startups that have grown in value from nothing to at least $1 billion US dollars. The phrase was invented in 2013 by venture capitalist Aileen Lee. Famous Unicorns include Airbnb, Facebook and SpaceX and, while the term is now in common parlance, the number of true Unicorns remains in the hundreds, at the time of writing.
A Unicorn bubble is what happens when venture capitalists or investors overvalue a company, and it can occur during their private phase or at the point of their initial public offering.
Extract credit is to Bear Markets and Beyond: A Bestiary of Business Terms by Dhruti Shah and Dominic Bailey (Portico). Illustrations by Dominic Bailey.
Money and me
Created with the Bank of England and TES, join Dennis, Minnie and the Beano gang to learn more.
Secondary School Resources
Meet some of the companies on London Stock Exchange's AIM
Team 17
Debbie Bestwick is no ‘n00b’[1]. She has wanted to be in the gaming world since she was 12. Her hair is purple and she is a gaming fanatic. Not your average CEO, you might think. But it’s not slick suits and slick charts that matters to investors on London Stock Exchange, AIM market. What matters is how good you are at what you love doing.
As a result, when her company joined London Stock Exchange's market for smaller growing companies, AIM, it was very popular. Lots of people bought shares, which meant the company raised the money to pay back the money they had borrowed to get started. They were also able to reward their hardworking team, and to make sure the team keep getting rewarded in the future by giving them a share in the business.
This was no overnight success. The company was founded in 1990. But it has kept coming up with new ideas and now has over 100 video games, including ones it made itself and games that small developers had created that deserve recognition.
DID YOU KNOW: there are more than 2.5bn gamers across the world. Companies are more attractive to investors if they have lots of potential customers.
Hotel Chocolat
Angus and Peter’s first idea was providing peppermints for people in business meetings. But once that fizzy feeling in your mouth has gone, it’s forgotten. What they needed was something with an emotional connection. Something that they could get creative with. The answer (obvious, really) was chocolate.
But chocolate is still just chocolate. So they came up with a cool name: Hotel Chocolat (notice the ‘e’ has gone, so you have to say it in a smooth French accent). Now they weren’t just selling chocolate, they were giving people an experience of luxury. It was hard work, but the business was a great success.
Angus and Peter spent many years ploughing their profits back into the business but eventually they wanted to raise some money for themselves and their families. So they decided to sell some shares to other people, through AIM, London Stock Exchange's market for smaller growing companies. It was very popular with investors who decided, correctly, that with more financial resources, Hotel Chocolat would be able to make even more chocolate, and even more people would buy it.
Hotel Chocolat didn’t want to only sell chocolate, they wanted to grow their own cocoa farm so raised capital from investors and bought land in the Caribbean.
Angus says: “Listing on the London Stock Exchange has helped raise our profile as a British success story.”
[1] Gamer slang for newbie, someone who is new to online gaming.
Finance can be green too
How to protect our environment and tackle climate change is one of the biggest challenges for everyone around the world. So how does the stock exchange and finance help to make the planet a greener, better place?
We work with lots of companies that are doing amazing things to help the environment. Some are developing and investing in renewable energy like solar and wind power. Others are finding more effective ways to manage and recycle our waste. Others are inventing new technologies that will make our daily lives and activities more environmentally friendly.
More and more investors want to buy shares in these businesses.
They think that these companies will become more successful in the future and, when they do, the investors will receive a share of the profits. But it’s not just about profits, people want to invest in businesses that are helping to make the world a better place.
The extra cash that investors put in to businesses help them to do more of their good work – whether that’s designing new products, hiring new people or selling more of their products around the world to help other countries tackle climate change.
To help these companies to stand out, London Stock Exchange has developed a special badge called the ‘Green Economy Mark’. This badge shows that at least half of the sales by these companies come from helping make the economy greener.
You can find out about some of these companies below. See the full list of Green Economy Mark companies.
Calisen
Calisen owns millions of ‘smart meters’ which tell you how much electricity and gas your home is using and so how to save energy (and money, too). Over the next few years, their engineers will install smart meters into millions more houses and businesses to help make Britain way more energy efficient.
Biffa
Biffa is helping to change the way people think about waste. It collects 15,000 tonnes of rubbish every day from around 76,000 businesses and 2.2 million households. It doesn’t just collect rubbish; it recycles, treats, and safely disposes of it. It is building facilities that will create energy from waste that can’t be recycled - helping to power our homes.
Oxford Instruments
Oxford Instruments may be one of the cleverest companies in Britain. Its knowledge about the performance of materials means that it can help large industrial companies and scientific researchers in many important areas – from finding cures for cancer to improving batteries for electric vehicles.
Xeros
Xeros has developed technologies to reduce the environmental impact of your clothes, cutting the amount of water and chemicals used to make and wash them, reducing energy use and CO2 emissions. It has also developed a device for your washing machine to prevent microplastics polluting the world’s oceans.
DS Smith
DS Smith is a global packaging company, supported by recycling and papermaking divisions. With sustainability and circularity at the heart of its business model, it is the largest collector of paper and cardboard in Europe, which it uses to make cardboard packaging (mainly for food and drink products) which can then be recycled again. To do this, it employs around 30,000 people across 34 countries.
Good Energy
Good Energy supplies homes and businesses around the UK with energy that comes from renewable sources. It makes it easy for people to buy their energy locally, such as from nearby wind farms or gas made from food waste.
Johnson Matthey
Johnson Matthey is a global leader in science that makes the world cleaner and healthier. The company invented the first catalytic convertor and today its catalysts prevent around 20 million tonnes of pollutants from entering the atmosphere every year. It uses its scientific expertise to enable cleaner air, improved health and the more efficient use of our planet's natural resources.
