Discover how anyone, regardless of age or financial background, can invest in shares on the Johannesburg Stock Exchange and benefit from various educational resources provided by the JSE. File photo.
No, it’s not just investment professionals or rich people who invest directly in companies on the Johannesburg Stock Exchange, you can too, at any time, at any age.
Investing in shares on the JSE can be financially advantageous at any time, and can be pursued at any age or phase in life.
Whether young or old, novice or seasoned in finance and the markets, anyone can buy shares on the JSE through an authorised stockbroker.
The prices of the shares, which are traded up and down every day for a wide variety of reasons, also vary greatly, and it is nowadays even possible to buy fractions of shares that may seem very expensive, through some registered brokers.
The JSE, in response to BR questions on this matter, suggests that to find a registered stockbroker, use the “Find a Broker” tool on the JSE website, which helps you locate accredited brokers and institutions.
These professionals can provide valuable insights and facilitate easy access to the market, ensuring your investments are managed efficiently and effectively.
To verify the authenticity of a Financial Service Provider, the JSE has developed a verification tool, Verify-A-broker, which allows investors to verify whether a broker is an authorised FSP or JSE broker.
To enable and empower individuals on their investment journey, the JSE has invested in several investor educational initiatives.
These programmes include the Investor Avenue podcast, JSE Stock Picks, Virtual Trading Game, the Investment Challenge, and learning modules that are freely available on the JSE website.
Shares are a valuable wealth-generating tool, either in the form of income from dividends, capital growth, or both, for the future. Most investors, even those who are conservative, want some level of wealth generation from their portfolio, the JSE says.
You can choose to invest in shares so that you make the most of your current income for future goals, such as: Investing in future education, large purchases, such as buying a house or car retirement planning, or starting a business.
To buy shares on the JSE, an individual investor needs to follow a few easy steps:
- Open a brokerage account with a JSE-registered stockbroker
- Research the companies listed on the JSE to identify potential investments.
- Fund your brokerage account by depositing money into it.
- Place a buy order for the chosen shares using the brokerage platform.
- Regularly review and manage the investment portfolio to ensure it aligns with their financial goals.
When buying shares on the JSE, investors can expect to pay a few costs. Brokerage fees are one of the primary costs. Additionally, depending on the broker, there may also be other fees for account maintenance, research, and advisory services.
It is important for investors to be aware of these costs and factor them into their investment decisions.
As a key player in the South African economy, the JSE is a dedicated advocate for the economic empowerment of both our investors and the nation. To this end, for example, the JSE created the Empowerment Segment in 2015, which promotes Black Economic Empowerment (BEE) share schemes.
These schemes enable previously disadvantaged South Africans to own stakes in companies and benefit from their growth. Additionally, through financial literacy programmes such as the JSE Investment Challenge, JSE SheInvests, the Virtual Trading Game, and supporting CSI initiatives, the bourse aims to educate and empower individuals to make informed investment decisions.
Furthermore, in December 2024, the JSE launched the Claim It initiative, which addresses the issue of unclaimed dividends. With an estimated R4.5 billion in unclaimed dividends, this initiative aims to identify and return these funds to their rightful owners.
By doing so, the JSE not only helps individuals reclaim their financial assets but also provides an educational resource about investing and dividends. This initiative is a significant step towards economic empowerment, as it ensures that investors can fully benefit from their investments.
Several prominent companies with shareholder bases of unclaimed dividends have joined the JSE’s charge to financially empower South Africans by providing resources and guidance on how to claim their rightful benefits.
Currently, about 309 900 South Africans are eligible for unclaimed dividends from companies such as YeboYethu, Cashbuild Ltd, Naspers, Old Mutual, and Growthpoint Properties, just to name a few.
The JSE says there are some fundamental components investors should reflect on and research when building a resilient investment portfolio, of which a share is one component: These include, but are not limited to, factors such as their:
1. Risk tolerance (low, medium to high-risk tolerance),
2. Investment goal(s) (investment protection and/or growth), and
3. Investment horizon (long, medium and short term).
It's wise to assess the prospect of investing in an individual share in the context of how it enables an individual’s wealth goals. It is also advisable for novice investors to consider investing in Exchange Traded Funds, or Actively Managed Exchange Traded Funds, which have already taken certain factors into consideration.
In general, for long-term investing, the following quantitative and qualitative factors provide valuable input into the investment decision-making process:
Understanding the company’s business model and how it generates revenue is crucial. This will help you as an investor gauge its potential for long-term success.
Next, review the company’s financial health by looking at its financial statements, including (but not limited to) revenue, profit margins, and debt levels. This will give an investor an idea of its stability and profitability.
It’s also important to evaluate the company’s leadership. A strong management team with a proven track record can significantly impact the company’s performance. Additionally, assess the company’s market position and its competitive advantages within its industry.
This will help you as an investor understand its growth potential and resilience against competitors.
Additionally, consider the risks and challenges the company may face, such as market volatility, regulatory changes, or industry-specific issues. Being aware of these risks can help you as an investor make more balanced investment decisions.
The most important component is to start!
This will help fully unlock the value of growth over time. Start small, invest frequently, keep learning, and monitor regularly, depending on the investment horizon.
The JSE says that by carefully considering these factors, investors may make better-informed investment decisions.
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