Share trading, should I take the plunge in the coming year

Despite having the highest literacy rate in Africa, a large number of Zimbabweans lack critical understanding of how the stock market works and how they can earn through an investment in shares. One can be missing an opportunity to earn more than they are currently doing or invest for long term goals. As such, today we explore how an investor can make returns from an investment in shares. It is advisable to seek professional advice before investing. To begin with, shares are bought and sold on a market called a Securities/Stock Exchange. Locally, we have the Zimbabwe Stock Exchange (ZSE), Financial Securities Exchange (FINSEC) and Victoria Falls Stock Exchange ( VFX) where company shares are bought or sold. Anyone interested in trading shares on the Stock Exchanges can place an order (buy or sell orders) anytime, anywhere through the C-TRADE platform.

Buying shares means taking on an ownership stake in the company an investor purchases equity in. This means that investing on the capital market also brings benefits that are part of being one of a business’s owners. Shareholders vote on corporate board members and certain business decisions. They also receive annual reports to learn more about the company.

When one owns stock, they participate in the growth of the company. As the value of the company increases, so does investment. There are mainly two ways of how shareholders are rewarded for owning shares. Share price increase can be just one way. This refers to the increase in the value of an investment for instance one can buy a share at$12 and then sell at $22.50, thus the value of an investment would have increased.

Investors can further benefit from dividend payments. These are payments made by a company to its shareholders as a distribution of profits. Dividends are an important portion of the investment return. Companies balance the cash they retain in the business to finance growth and the cash paid to shareholders to reward them for investing. If profits increase, you may receive more dividends and/or the price of the stock increases such that you sell at a profit (i.e. higher than you would have bought the stock price for).

C- TRADE allows investors to access, trade and get relevant information on companies listed on the ZSE and FINSEC with enhanced efficiency through various platforms. Access is through Unstructured Supplementary Service Data (USSD), an Android Application which is downloaded from Google Play Store and on Web portal.

Investors in shares further benefit from protection through the obligation of listed companies to disclose information related to their everyday business. Price sensitive information is available to the public. Shareholders, through the transparent listing and trading rules, are in a position to be updated regularly and on a daily basis on the events taking place at the company. Based on real-time demand and supply of securities, they are able to make decisions for investments in that type of security.

Stock markets are huge auction houses. Every day, investors are buying and selling their shares. This makes securities a liquid investment. When investors want to exit an investment, it is quick and easy to find a buyer. Other assets are much more difficult to sell. If you invested in an investment property, it could take time to find a buyer and get your money out. With securities, investors can find a buyer the very day. C-TRADE comes handy for investors who wish to exit as they are given the option of exiting whenever they want to.

To start investing on the ZSE and FINSEC listed counters on the go, simply download the C-TRADE mobile app or dial *727# across all mobile networks. Alternatively visit ctrade.co.zw to register.

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Netone subscribers— 08010077

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