The following table provides a summary of how the various business sectors represented on the London Stock Exchange have fared over the past twelve months. Three figures are provided for each sector:

This is the average percentage change in share prices over the last twelve months for companies within the sector.

Dividend yield refers to the latest annual dividend expressed as a percentage of the share price at the start of the year. For example, if the share price at the start of the year is £20 and during the year the company pays a £1 dividend, the dividend yield would be 5%. The figure shown is the average dividend yield over the last twelve months for companies within the sector.

This is the average total return shareholders have achieved over the past twelve months within the sector. It is the sum of the annual price change and the annual dividend yield.

Along with property, shares offer the most accessible investment opportunity for individuals to significantly grow their wealth.

It is important to realise that when you buy a share in a company what you are actually buying is a share of that company's future profits. Past profits have been and gone; what you are buying is a slice of the future. If a company is perceived as highly profitable in the future its shares will command a high share price whereas, if there are significant doubts about future profit performance, the share price will be much lower. As such, shares can provide two potential benefits:

The value of shares can increase, providing the opportunity to ultimately sell them for substantially more than you paid for them.

When companies make profits they can distribute them to shareholders in the form of dividends. When this occurs you will see cash literally being paid into your bank account.

The total return available to shareholders is the combination of these two benefits. For example, if you buy a share for £100 and its price increases to £115 during the year plus you receive a dividend of £5 during the intervening twelve months, you will have achieved a £20 return on a £100 investment.

The problem is nobody knows for sure what is going to happen in the future and expectations are continually changing. This explains why share prices are so volatile. The good news is numerous studies have shown that rates of return achieved on a well-diversified share portfolio over a number of years will consistently outstrip rates of return available on savings accounts and bonds; the evidence is overwhelming. What this means is, if you want to invest in shares, it is essential you are looking at them as long-term investment that spans years, rather than months.

When it comes to investing in shares many individuals are tempted to use the services of managed funds, allowing somebody else to make their investment decisions for them. Now comes the bad news. There have been numerous studies of managed fund performance over the years and the conclusions are nearly always the same - most managed funds underperform against the market in which they are investing. What this means is, if a particular market has delivered returns of 10% over the past year, the majority of managed funds will deliver a return of less than 10%. The most important contributing factor that is cited as to why managed funds underperform is nearly always the same - fees. When you place money with a managed fund you will inevitably incur charges and it is these very charges that will damage your rates of return.

But what is the alternative? To be a successful share investor, there are two questions you should always ask before buying shares in any company:

Investing in a company that is badly managed is a sure-fire way to lose money.

Overpaying for a share will damage your returns.

Traditionally answering both of these questions would involve spending hours reviewing a company's trading results, studying share price charts, reading analysts' reports, checking for news alerts and so the list goes on. Fortunately this is no longer the case. With access to up to twenty years' detailed trading history for every company listed on the London Stock Exchange, coupled with live share price data, the latest analysts' forecasts and live news feeds, the Share Finder Service does all the hard work for you.