A very basic, straight forward guide to get you started investing in shares at Port Moresby Stock Exchange.
So your budget is on track and you’re suddenly saving a fair bit of money. And now you’re looking for a way to make the most of your savings and even grow your money by investing in revenue generating assets. Or maybe, you just happen to have some streak of luck, as many call it and you realize you have some extra bucks and I mean more than you usually have and you want to invest your money. Now what?
Say you want to invest in shares at POMSoX. But you don’t any fair idea about how the whole stock market thing works. Here you have your money. Over there is POMSoX. In the middle are the two stock brokers namely; BSP capital and Kina Securities. How do you link them up and get your money to work? Ok! I am sure you are you’re interested in the sharemarket, but don’t know where to start. True?? Here’s the basic guide to get you started.
Perhaps you’ve watched the sharemarket update at the end of the EMTV news or other overseas channels but all that talk of POMSoX (or overseas exchanges), and All Ordinaries sounds like a weird, adults-only party game. Thankfully, investing in shares is neither terribly complicated nor expensive. It’s really not rocket science as many lead you to believe. Ah! The technical stock market jargons can be confusing. That is true. But the reality is, investing in stock market is not as complex as it seems.
In fact, it’s the perfect way for you to grow your money, get some passive income and even receive some tax benefits to boot.
So What Exactly Are Shares?
Let me start you off by getting the basics right. If you have to invest in shares, then you need to know what shares are. Buying shares sounds fancy, but essentially what you are doing is buying a very small part of a company. Big companies list on the sharemarket in order to get investors to buy into the company. In exchange, investors often get paid some of the profits made for the company (called dividends) and they get to be a part of the growth of the business.
About 21 companies are already listed on the Papua New Guinea sharemarket, known as the POMSoX. Companies such as BSP, City Pharmacy, Oil Search, New Britain Palm Oil Limited and more are all listed on the POMSoX and offer you the chance to own a small part of them.
Open Brokerage Account
The first thing you need to do is open a brokerage account. This essentially provides the interface between you and the share market and allows you to buy and sell your shares at POMSoX.
There are two stock brokers in PNG. BSP Capital and Kina Securities.
You will want to compare a few and consider:
- Brokerage account fee
- The fees charged on transactions.
- Whether you need to open a cash account with them, or if you can pay for trades from your normal savings account;
- Whether interest is paid on your cash while it is sitting in your transaction account; and
- What research the broker provides.
Education: How Do I Know What Shares to Buy?
It’s not as hard as you think, actually. Warren Buffett, one of the most successful investors of all time, has made his money buying into good quality businesses at fair prices, and then holding onto them for a long time. That’s it really.
Think about the businesses from your childhood that are still around today. Companies have long established business models that have stood the test of time. If you can imagine the company still being around in twenty years’ time then that’s the type of company you should invest in.
Before you do anything. We suggest you stop and understand the art of investing in share market. Every investment involves risk and if you are not careful, you can lose money. The best way to minimize your losses and maximize your gain in share market is understanding share market and making informed decisions. Stock market billionaire Warren B Buffet once said;
“Risk is doing what you don’t know”
What Happens if the Stock Market Crashes?
Share prices go up and down depending on the supply and demand factor. If many desire a stock, the price goes up. If many drop a stock because of a certain circumstance, the share price drops. But if history is anything to go by, the share market is still the best place to park your money over the long term.Of course, when you get started you won’t be able to buy that many. But as you grow your portfolio and buy more shares you can have a well-diversified set of shares that will help you achieve growth for the future.
Action step: If you’ve been putting off investing in the share market, now’s the time to get serious. Research the companies you want to invest and go for it NOW
Do check our Grow Wealth articles out at our Hubpages self publishing site, California.
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