How to buy shares in companies listed on the JSE in South Africa

A step-by-step guide to buying JSE listed shares for beginners. You can be up and running with your very own share portfolio by following 4 easy steps.

Introduction: The JSE building in Sandton

The Johannesburg Stock Exchange is situated in Sandton, at JSE Limited, One Exchange Square, Gwen Lane, Sandown, 2196​. If you haven’t been there, go and have a look. They do group tours. And we have presented and attended many presentations there. But you cannot walk up to their front desk and ask to buy shares. They would simply refer you to a stock broker.

1. Choose a stock broker

There are many brokers listed on the JSE website. Some will help you to trade only shares, others will offer more products. And some might only deal with HNW individuals, looking to invest R1 million or more, while other brokers will accept small investments.

Some brokers make it extremely easy for you to get started, ie by offering share trading services online on your existing internet banking – but buyer beware, some of these trading fees can be astronomical. We discuss costs in another post. Don’t get taken for a ride.

2. Open an account

Once you have chosen your stock broker just call them and ask to open an account. They can either do it online or meet with you to do the required paperwork. The process is very similar to opening a bank account and you would need to provide your broker copies of your FICA documents, ie:

  Copy of your ID
  Proof of address (not older than 3 months)
  Proof of bank details (not older tan 3 months)
  Any SARS document showing your tax number

Once your account is open (usually within 24-48 hours), you can fund your account by transferring money into it (most likely with an EFT or at your bank) and then you are ready to start buying shares.

3. Choose your shares

When it comes to buying shares you have two options.

Choose the shares yourself – you have to make up your own mind on which companies or shares to buy or sell. This is method is called a ‘non-discretionary’ account (because your broker has no discretion over the shares traded, he simply executes your instructions). Fortunately there are some tools to help you decide which shares to buy. Have a look.

Or let the broker help you choose – and trade on your behalf. This is especially helpful if you are new to the market and don’t yet have the knowledge and skills or feel comfortable enough to make all the decisions. This method is called a managed account or ‘full discretionary’ account (because the broker or portfolio manager has full discretion over which share to trade in the account, according to the mandate). Read some of our managed account guidelines.

4. Buy the shares

Once you have decided what to trade, you contact your broker and instruct him to do the trades. Alternatively you can execute the trades directly on an online trading platform (or app on your phone, for when you are on the move).

In the case of a managed account this won’t even be necessary, as your portfolio manager would be acting according to the mandate and trading on your behalf – you just have to monitor the performance, at least quarterly.

Over to you

Are you ready to start investing? If so, contact us.

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