Now to this last thread:
We are going to be very basic for the benefit of everyone so those in the know bear with me. What we are going to talk about is what is involved for one to buy/invest in shares/stock/equities/portion/part ownership of a company on a Stock Exchange.
We are going to be very basic for the benefit of everyone so those in the know bear with me. What we are going to talk about is what is involved for one to buy/invest in shares/stock/equities/portion/part ownership of a company on a Stock Exchange.
https://twitter.com/mentorshipzim/status/1364166858929303555
What is a Stock Exchange?
It's a market created so that companies can raise money in a regulated manner. If Twitter wants money to expand it can raise it on a Stock Exchange (ZSE from now). But its owners will have to give up a portion/stock in exchange for cash.
It's a market created so that companies can raise money in a regulated manner. If Twitter wants money to expand it can raise it on a Stock Exchange (ZSE from now). But its owners will have to give up a portion/stock in exchange for cash.
What is a stock?
Stocks, also known as shares are issued by companies listed on ZSE. The 1st time Twitter use shares to raise capital it’s called Initial Public Offering (IPO). The 2nd would be a RIGHTS OFFER. Of their 100% ownership eg 100 shares, they might sell 30 to public.
Stocks, also known as shares are issued by companies listed on ZSE. The 1st time Twitter use shares to raise capital it’s called Initial Public Offering (IPO). The 2nd would be a RIGHTS OFFER. Of their 100% ownership eg 100 shares, they might sell 30 to public.
More basics
The ZSE facilitate the sale & purchase of stocks btwn investors & companies. The majority of stock trades take place btwn investors. For example, if u buy shares of Twitter you are buying shares that another investor has decided to sell -- not from Twitter itself.
The ZSE facilitate the sale & purchase of stocks btwn investors & companies. The majority of stock trades take place btwn investors. For example, if u buy shares of Twitter you are buying shares that another investor has decided to sell -- not from Twitter itself.
What is the benefit to those who buy?
If the funds raised help Twitter grow, it means its value shld also grow. Other interested investors would also want it/increased demand for shares already owned. If you paid $1 they have to pay u more. Maybe $1.50. that’s a 50% profit.
If the funds raised help Twitter grow, it means its value shld also grow. Other interested investors would also want it/increased demand for shares already owned. If you paid $1 they have to pay u more. Maybe $1.50. that’s a 50% profit.
What else?
That 50% is a capital gain. If Twitter misuses e money & doesn’t grow, you might want to sell. To get buyers for a poor performing share, you might have to sell lower than $1. maybe $0.50. You make a loss. Companies also pay dividends/share profits & you make money.
That 50% is a capital gain. If Twitter misuses e money & doesn’t grow, you might want to sell. To get buyers for a poor performing share, you might have to sell lower than $1. maybe $0.50. You make a loss. Companies also pay dividends/share profits & you make money.
What determines share price movements?
Share prices go up or down depending on how the company ITSELF is performing or future expectations. It’s a simple demand & supply issue. There are other macro-factors that also affect share prices. Politics chaidzo can move markets
Share prices go up or down depending on how the company ITSELF is performing or future expectations. It’s a simple demand & supply issue. There are other macro-factors that also affect share prices. Politics chaidzo can move markets
The risks
Stock market investments tho lucrative, do not guarantee positive returns. Prices can go either up or down after you bought. So you have to choose the companies you invest in wisely. If your objective is share price appreciation buy one likely to attract other buyers.
Stock market investments tho lucrative, do not guarantee positive returns. Prices can go either up or down after you bought. So you have to choose the companies you invest in wisely. If your objective is share price appreciation buy one likely to attract other buyers.
Risks
If you buy one that everybody hates, then it might fall after you bought. So buy a top performer, that everyone would want to pay more for or one that will share its profits with you thru paying dividends. Inflation may also erode the value of shares even if price go up.
If you buy one that everybody hates, then it might fall after you bought. So buy a top performer, that everyone would want to pay more for or one that will share its profits with you thru paying dividends. Inflation may also erode the value of shares even if price go up.
Time to play the Game
I think we got the basics now. So how does one participate?
You open an account with a stockbroker zse.co.zw has their contacts. Or you use an online platform zsedirect.co.zw. Or ask these guys @CTRADEmobile.
I think we got the basics now. So how does one participate?
You open an account with a stockbroker zse.co.zw has their contacts. Or you use an online platform zsedirect.co.zw. Or ask these guys @CTRADEmobile.
Account Opening
There are three accounts that you have to open
A stockbrokers account
CSD account (where your shares will be kept electronically)
Custodial account (where they make sure your shares have been put in your name)
Luckily it’s a one stop shop to open these.
There are three accounts that you have to open
A stockbrokers account
CSD account (where your shares will be kept electronically)
Custodial account (where they make sure your shares have been put in your name)
Luckily it’s a one stop shop to open these.
Requirements
To open the accounts, you must have a local bank account or Ecocash account. If you are outside Zim, you have to open a local bank account or custodial account.
They will also require proof of residents wherever you are, copy of ID and a passport size photo (s)
To open the accounts, you must have a local bank account or Ecocash account. If you are outside Zim, you have to open a local bank account or custodial account.
They will also require proof of residents wherever you are, copy of ID and a passport size photo (s)
Its trading time
Once account is opened, probably after 24 hrs you can send money to the broker or load money into your ZSEDirect account or C-Trade account. @ZSE has some YouTube videos that can guide you in placing orders. If its thru broker, just give them a call, or email.
Once account is opened, probably after 24 hrs you can send money to the broker or load money into your ZSEDirect account or C-Trade account. @ZSE has some YouTube videos that can guide you in placing orders. If its thru broker, just give them a call, or email.
How do I know what to buy?
Haa motosimba kuverenga. My basic advice is that invest in companies you know how they make money & whether they are making money. Ask your broker to share their research and recommendations with you.
Haa motosimba kuverenga. My basic advice is that invest in companies you know how they make money & whether they are making money. Ask your broker to share their research and recommendations with you.
When to buy and when to sell
The basic rule is buy low, sell high. But how do you know? You have to learn the basic metrics for evaluating stocks. One such metric is PE ratio. That is Price of single share/Earnings of a single share. If price is 20 and earnings is 5 PE is 4.
The basic rule is buy low, sell high. But how do you know? You have to learn the basic metrics for evaluating stocks. One such metric is PE ratio. That is Price of single share/Earnings of a single share. If price is 20 and earnings is 5 PE is 4.
When to buy
If you are buying a bank you must know the average PE ratio of banks. If for example, the average PE ratio for banks is 4, you must not pay a price that is 5 times above earnings per share. Its not a cast-in-stone rule though. Some stocks trade at a premium.
If you are buying a bank you must know the average PE ratio of banks. If for example, the average PE ratio for banks is 4, you must not pay a price that is 5 times above earnings per share. Its not a cast-in-stone rule though. Some stocks trade at a premium.
When to sell
You sell when you think you have made enough gains/profit or when your objectives have been met or in order to meet your objectives. You can also sell when you want to cut your losses or when you think your objectives won’t be met. Don’t follow the crowd.
You sell when you think you have made enough gains/profit or when your objectives have been met or in order to meet your objectives. You can also sell when you want to cut your losses or when you think your objectives won’t be met. Don’t follow the crowd.
Stages of a stock Market
There are typically four stages to a market cycle: accumulation, mark-up, distribution and the mark-down phase. The accumulation phase happens when a market is at a low and buyers begin to snap up stocks at discounted prices.
There are typically four stages to a market cycle: accumulation, mark-up, distribution and the mark-down phase. The accumulation phase happens when a market is at a low and buyers begin to snap up stocks at discounted prices.
At the beginning of the mark-up phase prices have been stable for a while, and more buyers start jumping on the bandwagon driving up the price of stock. At the end of this phase, as buyers jump in en masse, the market makes a final spike as it nears the top of a bubble.
During the distribution phase sentiment becomes mixed, and in the mark-down phase, prices typically plunge
How much should I invest
First, let's talk about the money you shouldn't invest in stocks. The stock market is no place for money that you might need in the short term. Your emergency funds for example, or next term’s school fees. Unonyura.
First, let's talk about the money you shouldn't invest in stocks. The stock market is no place for money that you might need in the short term. Your emergency funds for example, or next term’s school fees. Unonyura.
How much should I invest?
Invest an amount that will allow you to meet your objectives. Let’s use last year’s performance. If you wanted to end the year with $1000 then in January, you should have invested $100 on average. But this depends on which stocks you buy.
Invest an amount that will allow you to meet your objectives. Let’s use last year’s performance. If you wanted to end the year with $1000 then in January, you should have invested $100 on average. But this depends on which stocks you buy.
How much should I invest?
This means you have to forecast/predict/project how much the stock you want to buy will appreciate by. If you think it will gain 100% then to end the year with $1000 you have to invest $500. Don’t 4get associated risks. It might not happen as planned.
This means you have to forecast/predict/project how much the stock you want to buy will appreciate by. If you think it will gain 100% then to end the year with $1000 you have to invest $500. Don’t 4get associated risks. It might not happen as planned.
Bottom line
The most surefire way to make money in the stock market is to buy shares of great businesses at reasonable prices and hold on to the shares for as long as the businesses remain great (or until you need the money). Watch out for trading opportunities as well.
The most surefire way to make money in the stock market is to buy shares of great businesses at reasonable prices and hold on to the shares for as long as the businesses remain great (or until you need the money). Watch out for trading opportunities as well.
If you can’t go it alone, you can also buy through Asset Management Companies. The SECZim website has their contact details. The biggest investors on the stock market are Pension Funds, your NSSAs & Old Mutual. Some say ZSE yakadhakwa but ndokuri kuiswa penjeni yavo.
That was my last thread. For the rest of the day and my time on this platform, I will be taking questions.
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