Here is your guide to buying shares in South Africa.
Want to buy shares in South Africa? You have to be above 18 years of age and have a brokerage account. With the market surge faced during and after the pandemic, trading in shares has become even cheaper and easier in South Africa.
When you buy a stock, you also get a certain ownership in a particular company. In fact, now, earning money through shares is as simple as buying and selling a product. You can also earn money through the dividends that a company pays. Dividends are paid a maximum of twice a year and can be utilized or reinvested in the company only.
Step 1- Choose A Stockbroker
In order to start with the buying and selling of shares, you have to get a stockbroker. However, you can either choose a broker online, an online trading platform or opt for a full-time stockbroker who will provide services. However, a full-service broker can be expensive as per your needs. This is why opting for an online trading platform will be better. Several trading platforms in South Africa charge only 0.25% fees per trade.
Step 2- Register on The Trading Platform
To get on board with a brokerage website, you have to be at least 18 years old and be a resident of South Africa. Mostly, the registration on these sites is free. However, at times, you have to pay a fee to transfer the funds to your account. While registering, you will require identification documents, your tax file number, personal details, and bank details. After that, your account will be approved.
Step 3- Plan Properly Before Buying
Stocks are a good investment for long-term and short-term purposes, but they are equally risky. So, before you start buying them, know your risk appetite. Make a plan of how much you are willing to invest and how much you are willing to lose. Decide your investment time horizon and keep a backup plan in case the market falls.
Step 4- Pick The Stocks
The South African market has a large number of shares to invest in. You will have to conduct proper research before you put your money in the stocks. Fundamental and technical analysis of stocks is essential. You can also take up investment suggestions from the top companies.
Step 5- Order The Stocks
After concluding on the stocks that you want to purchase, you have to place the order. If you have a full-time stockbroker, then you have to inform them to make your purchase. If you are using the trading platforms, you will have to enter the stock code or company name, choose the type of order you want to place and confirm your purchase.
Step 6- Pay For The Shares
The amount that is to be charged for the number of shares you are buying will be automatically deducted from your bank account.
The Bottom Line
After you are done purchasing the shares, your next step would be to keep an eye on the price fluctuation of the stocks that would determine your profit or loss. However, if you do not have a short-term strategy, look at the price fluctuations monthly and not daily.
