South Africans are not good spenders or savers. As you can see in the image below, South Africans tend to overspend and not save.
To improve the way South Africans manage their money, it’s important for them to know more about savings and investments. The lack of financial knowledge has affected most people’s knowledge and understanding about investing and deterred them from finding ways to make their money work better for them.
Believe it or not, ordinary South Africans can invest on the Johannesburg Stock Exchange (JSE) from only R300 per month through a tax-free savings account (TFSA). (Source: JSE Website).
If you’re interested in taking a step towards investing your money on the JSE, read our tips below:
Invest long term
Warren Buffett, one of the most successful investors of all time, believes that a good investment should bring a growing passive future income; however, many would rather sell their shares at a profit within a short period, making them gamblers, not investors. Many investors make the mistake of trying to time the market; this is almost never as effective as a passive strategy. Under 20% of active fund managers beat the market every year, and they are not usually the same 20% as the year before, so you have better odds of success if opt for a long term, passive strategy.
Don’t invest blindly
A lot of thought goes into committing to a realistic investment plan. You need to consider what you want to get out of the investment and how you can get there. You may need a little help making sure you invest your money wisely. If you’d like to learn how to invest successfully, build a winning investment portfolio and gain financial freedom, purchase the PDSnet online course for only R1570. The course has a total of 27 lecture modules, multiple choice exams, free support and more. Purchase the online investment course and start investing today.
Diversify your investments
As cliché as it sounds, don’t put all your eggs in one basket – this can lead to a disaster. Putting money into different types of investments will expose your money to more opportunities and prevent you from losing your investments.
Only take sound advice
Don’t take advice from just anybody. A lot of people may offer all kinds of hints and tips; however, this “help” can lead to disappointment. If you are serious about making a lot of money on the JSE, consider purchasing stock market charting software to receive relevant, up-to-date data to ensure your financial success.
Don’t just follow the crowd
Greed and fear play a big role in the share prices as there is definitely an emotional component in investing in shares. It’s easy to want to start buying shares without thinking twice when the stock market is rising rapidly; in the same way, it’s easy to jump off the boat in a panic when the stock market begins to drop like a hot potato. The problem with this is that bad shares also rise when the stock market rises rapidly, so following the crowd may leave you with bad investments for when the market starts falling. Good shares recover from dips in the market, so your best bet is to keep your good shares and wait for the market to rise again instead of following others in a panic.
This article is purely for information purposes only. If you are serious about investing in the JSE, click on the link below.