Q. “I received a trade signal last week to buy Reinet… I am a new member with Red Hot Storm Trader and wanted to know what the big difference is between buying 200 Reinet CFDs versus buying 200 Reinet shares and what instrument I should buy with Red Hot Storm Trader?”
The BIGGEST difference between buying shares versus buying CFDs is that when you buy CFDs, you will gain exposure to the ... ››› more
I love receiving dividends but reinvesting dividends is not always the most cost effective way to invest it.
Let me explain...
When you only get paid out a couple of hundred or thousand rand in dividends, the brokerage costs of reinvesting that cash can eat away a large chunk of the money.
That's why some investors draw the cash and spend it. This isn't a wise move either.
So, today ... ››› more
“Francois: I read your article on using ‘buy limit orders' to buy shares at lower prices and decided to do it. But something seems to have gone horribly wrong. I tried buying R5,000 worth of shares with a limit price of 51c. But when I checked my account it only traded about R500 worth. My cost per share, after brokerage, is now 67c per share. What's going on???” - BM
The right tools, u... ››› more
Let's face it, investing has always been something for the richest 2%.
The minimum for opening share trading accounts at many stockbrokers is R10,000. Then there's the rule I've always stuck by, don't invest less than R5,000 in a single share…
That's all because of minimum brokerage costs. Whether you buy R50 or R5,000 of shares your transaction cost will amount to around R100. So only onc... ››› more
If you want to buy and sell shares on the stock market, you need to open a brokerage account.
There are a number of different stock brokers out there to pick from.
So how can you whittle through them to find the stock broker best suited to you and your needs?
Read on to find out what you should look at…
What you need to check when picking a stock broker
One of the major factors... ››› more
To buy penny stocks on the stock market, you need to have an account with a stock broker.
There are a number of stock brokers to pick from and there are also different types of accounts.
So what sort of accounts are there? And what's the best option for you?
Let's take a closer look…
The three different types of brokerage account
There are three different types of brokerage acc... ››› more
CFDs, or contracts for difference, are a type of trading instrument. You can trade a wide array of underlying assets, including shares and currencies.
So how do contracts for difference work?
Let's take a closer look…
You trade on margin with CFDs
Like with other financial derivatives, you trade on margin with CFDs. This means you put down a small portion of your overall exposure ... ››› more
The primary reason for investing in shares is to make money. Why else would you put your money at risk on the stock market?
To make sure your investments are performing as you think they should, it makes sense to perform an audit every now and again.
So how can you check how your shares are really performing?
Read on to find out…
Working out how much money you’re really making f... ››› more
If you want to invest in shares, you'll need to open an account with a stock broker.
It's a relatively straightforward process.
You need to have specific documentation to comply with FICA regulations and money to deposit in your account. Then it's a case of finding a stock broker.
Let's take a closer look at what you need to do…
#1: Get your documents ready for opening your broke... ››› more
My friend Yianni phoned me on Thursday morning. He was beyond excited to tell me that he found a ‘dream fund' that returns 17% a year.
I told Yianni I've been looking to invest a portion of my money in a fund that offers those kinds of returns. But before excitement filled my veins, I asked him some crucial questions.
Let's just say after he heard what I had to say, he probably saved hims... ››› more
Once you've decided what stock broker you want to open an account with, there are a few things that you should check first.
So what are these things? And when will you be ready to start investing?
Read on to find out…
How to decide what type of stock broker account to pick
You should base the type of stock broker account you open on the level of support and guidance you feel you n... ››› more
Until quite recently, if you wanted to buy or sell shares, you had to phone up your stockbroker and they would carry out your instructions for you.
Over the past decade, there's been a shift to online brokerage accounts. If you're up to speed with how the buying and selling of shares works, this could be a great way for you to manage your portfolio.
But with a number of different online stoc... ››› more
Without a stockbroker, you can't buy or sell shares. A stockbroker acts as the go between you and the stock exchange.
So if you don't have an account with a stockbroker, how do you go about picking one?
Read on to find out…
Step #1: Decide how you want to trade
You need to decide how you want to trade with your stockbroker. Do you want to do it all online? Or do you want the conve... ››› more
Carl, a friend of mine, came into the stock market and in just one week, he blew 75% of his portfolio.
This is surprising because he spent a good eight months learning the ropes on the stock market and trading strategies.
What's even stranger is that all five trades of his were winners and he still ended up blowing a huge portion of his account.
All because of this one thing…
And ... ››› more
When it comes to making money in the markets, trading using financial instruments like single stock futures and CFDs is definitely a great way to go.
But the most common complaint I hear from traders is that brokerage costs eat away most of their profits. I've even heard traders say, “I'm tired of trading just to make my broker rich!”
Now, if this sounds familiar to you, then you need to... ››› more
We recommend the following brokers to FSP Invest readers. They offer our readers speical, reduced brokerage rates:
Imara S.P. Reid
Global Trader 247
To qualify for your preferred rates please inform the broker you are a FSP Invest member.
Please consider your choice of broker carefully, and select the broker best suited to you and your needs. You can also review a fu... ››› more
It probably won't come as a surprise to you that stockbrokers are in the business to make money. When you buy and sell shares, your stockbroker makes sure he gets his share. So how does a stockbroker make money from you? And how can you work this out for yourself? Let's take a closer look…
A stockbroker makes his money in two ways
A stockbroker earns money from you as a client in two ways:
... ››› more
Once you've decided you're going to invest in shares, you need to find yourself a stockbroker. There are a huge number of them out there waiting for your business. You just need to look around until you find one that suits your needs and investment budget. There are three main types of brokerage accounts available. Let's take a closer look at each of these…
Brokerage account #1: Execution-... ››› more
Often readers ask me how much they should invest into a share.
Put too much money into one share and you could lose everything. Too little and you won't get anywhere when it comes to profits.
So today I'll show you exactly why investing too little is a more common, and more costly mistake than investing too much.
Why you MUST invest a minimum of R5,000
Every investor needs ... ››› more
If you're serious about buying stocks, you'll need to make sure you have an adequate sum of money put aside to invest. You shouldn't use any money you have earmarked for other purposes. And you need to be comfortable to put this money to work in the market for a few years at the very least. So how much do you need? Read on to find out…
Ge... ››› more
Disclaimer Note that FSP Invest, a division of Fleet Street Publications (Pty) Ltd, is a research house and not a registered broker, financial advisor or financial service provider. Our editors and customer services teams also do not give personal investment advice. The advice in this website is general advice only and may not be appropriate to your particular investment objectives, financial situation or particular needs, so before investing or if in any doubt about your personal situation, you should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Board.
We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found in this publication.
Remember: Never invest more than you can afford to spare and that the value of any investment, and the income derived from it, can go down as well as up. The past is not necessarily a guide to future performance.
Editors or contributors may have an interest in investments commented on in this newsletter. However they have signed restraints to prevent the abuse of their position as contributors to this publication.