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Jjdewet - what sort of starting "capital" should one have should he wish to begin investing in the stock market? Both for long term investments as well as short term trading.
Also, what are the broker fees like?
"The way to gain a good reputation, is to endeavor to be what you desire to appear." - Socrates
Jjdewet - what sort of starting "capital" should one have should he wish to begin investing in the stock market? Both for long term investments as well as short term trading.
Also, what are the broker fees like?
Starting capital for investing doesn't have to be a certain amount. But it is important to remember that there is a difference between trading (speculating) en investing. If you invest, you can buy shares on a monthly basis using a debit order, which is much the same as a retirement annuity, only, you get to decide where to invest it. Satrix is a good example of that. Starting this at an early stage, will provide you with some capital later on in your life for investing.
For trading, determining the amout of starting capital is very difficult, and will vary. I have always thought with R20,000.00 you can do something, but you can't really. Even R100,000.00 is not enough. The important thing here is Risk management and patience.
Brokerage fees vary and is usually charged as a % of exposure. So if you buy R20,000.00 worth of a share, fees will be a % of that. Ex: fees at 1% will amount to R200.00 in costs. This is only the brokerage fee. There are also a lot of other charges like STRATE, Investor protection levy, STT and VAT.
Brokerage fees vary from 0.8% - 1.5% maybe more depending on the broker.
When investing in something like Satrix, what is the risk involved? Can i choose to make payments as and when I have the cash or does it have to be a regular payment?
Also, what is the return like in a long term investment in comparison to, say, a fixed deposit/money market account?
Do you get dividend payouts from investments like Satrix?
"The way to gain a good reputation, is to endeavor to be what you desire to appear." - Socrates
Satrix40 is an index that replicates the Top40 index - which is waht people call "Blue chips". The only risk you have is that of the index going to zero, in which case you loose all your money. It is not a geared investment, so you can only loose what you invest.
You don't have to invest on a regular basis, you can buy it as when you have the money.
It also pays dividends.
i been monitoring mr price shares lately, and i think its a good investment. but the fact is that you cant go into the stock market with only like a grand. the broker fees kill you. you have to enter with like 5 or 10 grand to really have a chance at making money. so for now im just watching from the sidelines.
Mr Price is a decent share, and yes you do need to put down around R5K per trade to make it work, and even then, it should be a long term (5+) years before thinking about selling.
It it worth it. hell yeah, but only for the long term ie retirement.
Some great info there jjdewet - and satrix is a great way for guys to get into the market with minimum fees, as compared to unit trusts - even though maybe as not as focused - the savings on fees should make that up in most cases.
I do not agree with your 20K, and 100k minimum amounts though. I think as long as your trade is around R5K and you investing for the long term (10 years and longer) you are fine. I DO agree if it's a year or less though. But, as you say, it's whether you are speculating or investing.
Thats true. When investing, you can start with basically nothing...but fees will eat a lot of capital. When you want to be a cowboy and trade derivatives, you will need a lot of cash, and have a 95% to blow it...
Originally posted by Pap_sak
Some great info there jjdewet - and satrix is a great way for guys to get into the market with minimum fees, as compared to unit trusts - even though maybe as not as focused - the savings on fees should make that up in most cases.
I do not agree with your 20K, and 100k minimum amounts though. I think as long as your trade is around R5K and you investing for the long term (10 years and longer) you are fine. I DO agree if it's a year or less though. But, as you say, it's whether you are speculating or investing.
Up to about two years ago there was someone in the Free State who would watch the markets and then advise you when to buy and at what price and sell as well. He said that you could start with as little as R2000 and then buy a particular share on his recommendation and put it back into the market at the original price plus 10%. The 10% would cover all costs and give you a profit of 6%. If this is repeated 90 times R2000 could become R1m. He stopped doing this when the market became too volatile and he did not want to put other people at risk with his recommendations.
I have no doubt that over the long term the stock market would give a better yield than what any of the banks could give. Over the short term the whole thing becomes much more riskier and you have to have a good heart to invest / play on the stock exchange. It is easy to start the morning with a nice profit and within a half hour have a loss.
Someone who operates a business at www.world-focus.co.za has a system (program) they sell and you would become an investing member and they would then either email or sms early morning what you have to buy and at the same time tell what you have to sell. (I would appreciate some comments on this)
My own feeling is that unless you have someone who knows the markets very well and can interpret all the relevant graphs you have to make very sure that you have enough knowledge yourself to do short term investments.
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