SHARE TRAD­ING

Play­ing the stock mar­ket can be a ex­pe­ri­ence. Get your ducks in a row

CityPress - - Business -

IShadrak writes: want to start in­vest­ing on the JSE and have read about Top Trader Mar­kets, which will charge me R18 200 to set up the port­fo­lio and R250 a month to main­tain the port­fo­lio. It also pro­vides share­track­ing soft­ware that will en­able me to trade suc­cess­fully with the knowl­edge of which shares to pick and drop at cer­tain times. Is this a good way to start in­vest­ing? Rid­waan Moolla, a stock­bro­ker, replies: ook­ing at the com­pany web­site, it seems Top Trader Mar­kets is ba­si­cally sell­ing you a soft­ware pack­age that will pro­vide tech­ni­cal analy­ses of the stock mar­ket. Com­pa­nies such as th­ese are likely to come un­der closer scru­tiny from the Fi­nan­cial Ser­vices Board (FSB) and valid stock­bro­kers are up­set be­cause such com­pa­nies cre­ate false ex­pec­ta­tions for in­vestors with prom­ises of “mak­ing money be­fore lunchtime”.

Share trad­ing is not about mak­ing a quick buck. Most rep­utable stock­bro­kers will pro­vide a free, ba­sic tech­ni­cal anal­y­sis. If you are start­ing out as a share in­vestor, the tech­ni­cal anal­y­sis pro­gram you are sold by com­pa­nies such as Top Trader Mar­kets is prob­a­bly go­ing to be very com­plex, re­sult­ing in con­fu­sion.

As a novice in­vestor, you are much bet­ter off mak­ing a debit or­der in­vest­ment – for ex­am­ple, R300 a month via FNB Share Saver.

If you have a cap­i­tal out­lay of R18 000 avail­able, you would earn a much bet­ter re­turn in­vest­ing in an ex­change-traded fund such as the Sa­trix Top 40, which gives you ac­cess to the top 40 stocks on the JSE.

When you are ap­proached by com­pa­nies such as Top Trader Mar­kets, you should be ask­ing:

Are you or your sales agents ac­cred­ited by Fi­nan­cial Ad­vi­sory and In­ter­me­di­ary Ser­vices? If so, what is your fi­nan­cial ser­vices provider (FSP) num­ber? (You can then check the FSP num­ber on the FSB’s web­site at www.fsb.co.za)

Are you a reg­is­tered stock­bro­ker? (This in­for­ma­tion can be dou­ble-checked with the JSE, which main­tains a data­base of reg­is­tered stock­bro­kers.)

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