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A Fin24 user has just started to invest and is looking for some advice. She writes:
I would like to know what is the best company to invest in, as I have just started to invest in the FNB Sharebuilder.
Gusta Binikos, CEO of Share Investing at FNB, responds:
Whom to back?
There are various sectors on the JSE. The four main ones are resources (mining), banking, telecommunications and retail.
However, spread your risk and ‘pick a horse’ from each sectors – don’t put all your money into just one.
They’ll each perform quite differently, so if one sector is down another may be up and that’s a great way of spreading your risk.
The same applies to ETFs (exchange traded funds).
How do you go about getting the right information?
All listed companies have to have published financials, which means that any company you are looking at investing in will have information publically available.
In this internet age all companies' financials are easily available. Read as much as you can including business newspapers and magazines.
How do you know if a share will be a good performer this year?
The best way to do this is by picking a trusted good company.
There are companies known as "blue chip" companies, which is a company with a good track record that is recognised as financially sound.
However, remember nothing is a given, and the best investment is time, external factors such as the economy, international factors which are entirely out of the Company’s control may affect the price.
Which shares have done well so far?
The top performing companies in the Share Builder basket over the past year are as follows:
Ten points for beginner investors:
Start investing now:
The sooner you start to invest, the better for you. Time is most definitely the investor’s best friend, since it gives compounding time to work its magic.
Invest regularly:
Investing is not a once-off thing, it is something that you continue doing throughout your life.
Don’t borrow to invest:
Many people fall into this trap. Only invest what you can afford to lose.
You’re buying a company, not just shares:
A share performance is dependent on the company, which in turn is dependent on the environment in which it operates.
This includes its industry, the general economy, politics and its customers.
Buy shares in a company making a profit:
If you buy a share in a company not making a profit, you’re not investing, you’re running a risk.
Diversify your share portfolio:
Spread your investment across different companies and over different sectors. The biggest risk in investing is putting all your eggs in one basket.
The easiest way to diversify share investments is through unit trusts and exchange traded funds.
Don’t buy on hot tips:
Do your homework before investing in a company.
Don’t try to predict market moves:
Trying to predict the direction of the market is difficult; even experts are not always accurate.
Buy and hold for the long term:
Continue to monitor your shares during this period, but consider selling your shares if general economics have changed or if the value of your shares is not appreciating.
Be patient. Investing for the long term will let you ride out the unavoidable ups and downs of the market.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
I would like to know what is the best company to invest in, as I have just started to invest in the FNB Sharebuilder.
Gusta Binikos, CEO of Share Investing at FNB, responds:
Whom to back?
There are various sectors on the JSE. The four main ones are resources (mining), banking, telecommunications and retail.
However, spread your risk and ‘pick a horse’ from each sectors – don’t put all your money into just one.
They’ll each perform quite differently, so if one sector is down another may be up and that’s a great way of spreading your risk.
The same applies to ETFs (exchange traded funds).
How do you go about getting the right information?
All listed companies have to have published financials, which means that any company you are looking at investing in will have information publically available.
In this internet age all companies' financials are easily available. Read as much as you can including business newspapers and magazines.
How do you know if a share will be a good performer this year?
The best way to do this is by picking a trusted good company.
There are companies known as "blue chip" companies, which is a company with a good track record that is recognised as financially sound.
However, remember nothing is a given, and the best investment is time, external factors such as the economy, international factors which are entirely out of the Company’s control may affect the price.
Which shares have done well so far?
The top performing companies in the Share Builder basket over the past year are as follows:
Ten points for beginner investors:
Start investing now:
The sooner you start to invest, the better for you. Time is most definitely the investor’s best friend, since it gives compounding time to work its magic.
Invest regularly:
Investing is not a once-off thing, it is something that you continue doing throughout your life.
Don’t borrow to invest:
Many people fall into this trap. Only invest what you can afford to lose.
You’re buying a company, not just shares:
A share performance is dependent on the company, which in turn is dependent on the environment in which it operates.
This includes its industry, the general economy, politics and its customers.
Buy shares in a company making a profit:
If you buy a share in a company not making a profit, you’re not investing, you’re running a risk.
Diversify your share portfolio:
Spread your investment across different companies and over different sectors. The biggest risk in investing is putting all your eggs in one basket.
The easiest way to diversify share investments is through unit trusts and exchange traded funds.
Don’t buy on hot tips:
Do your homework before investing in a company.
Don’t try to predict market moves:
Trying to predict the direction of the market is difficult; even experts are not always accurate.
Buy and hold for the long term:
Continue to monitor your shares during this period, but consider selling your shares if general economics have changed or if the value of your shares is not appreciating.
Be patient. Investing for the long term will let you ride out the unavoidable ups and downs of the market.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
