The stock market has been viewed as the pinnacle of investing for many years. With the likes of wall street making, it seems like a wild scene from a movie, the truth is the South African Stock Market is calmer and is still classified as a popular investment choice by many South Africans.
Easy Equities, for example, have just surpassed 700 000 users on its online investing platform. This shows the amount of interest the stock market still gets today. And with costs coming down and investing becoming more affordable, it is easier for the average South African to consider the South African stock market as an investment option.
Should I invest in the South African Stock Market?
The true answer is it depends. Every person is different and has different needs and goals. We recommend sitting down with a professional financial advisor to discuss your options before investing.
Sanlam says that stock market investment should be looked at for the long term. They say between 10-50 years and is an option for goals like retirement, wealth growth and your children’s education. This is because the stock market is volatile over the short period but has been shown to produce good returns over the long term.
What is the stock market?
The stock market is a marketplace where you can buy and sell shares of different companies and assets. These shares of a company give you the ability to earn from the company as it grows, and your shares are worth more and through the company’s earnings paid out to you through dividends. It is an easy way to be a silent investor in a company.
However, as a shareholder you are entitled to go to an Annual General Meeting (AGM) where you can vote on changes, board members and other items raised in the AGM.
The stock markets all around the world are regulated by the local government authorities which ensure companies and investors are transparent, fair and just in their activities.
The first-ever stock exchange is said to be the Amsterdam stock exchange which stared in the 17th century. Locally our Johannesburg stock exchange, sometimes referred to as the South African stock exchange, started in 1887. This shows how far back stock investing goes.
The stock exchange date way back to the 17th century and has shown returns for investors over decades. This investment option can be suited to some long term, risk-tolerant investors. To work out if it is for you, speak to your financial advisor!