INTRODUCTION
Shares are of one of the most popular financial instruments traded today. When trading shares, you must consider both the company and broader industry that it’s in. Stock markets have set trading hours where you can trade shares. When trading shares you have two options.
TRADITIONAL STOCK/SHARE TRADING
An investor can purchase actual shares in companies on different exchanges where they are listed. For instance, you can purchase Apple shares on the NASDAQ stock exchange, where you own a stake in the company. This is known as a more long-term approach to trading, where the trader is usually expecting the price to rise over a time frame of months to years.
TRADING CFDS ON STOCKS/SHARES
The alternative to traditional share trading is trading CFDs on shares. You can trade a contract for difference (CFD) on a particular equity, speculating on the price difference of an underlying asset (in this case a share) without having to own it. A CFD is a derivative product where a broker typically agrees to pay an investor the difference in the value of a security between an opening and closing price. CFD trading tends to be considered a short-term approach to trading, where trades are opened and closed within day to week timeframes, but this does not necessarily mean they have to be short-term. Less commonly, CFDs can be held for months at a time, but this incurs costs such as overnight costs (due to the leverage borrowed).
PENNY STOCKS
The Securities and Exchange Commission (SEC) defines a “penny stock” as a security issued by a small-cap or micro-cap company that has a market capitalization of less than $250 million. A large number of well-established companies were once trading for under £1 a share, including Ford, JD Sports and Monster
Beverage. Those who invested in these companies during their penny stock days could have made a substantial gain over time. Penny stocks come with high risks and the potential for above-average returns, and investing in them requires care and caution. The penny stock market is full of scams. Ignore the noise and focus. With Mega Purpose Investment Group, due diligence and ground research is carried out before any recommendations is made to make investments on a penny stock. However if doubts exist, investors are always advised to Do Your Own Research (DYOR).
WARRANTS
According to the Johannesburg Stock Exchange, Warrants are financial instruments that give investors the right but not obligation to buy (Call Warrants) or sell (Put Warrants) an underlying asset, at an agreed price (the strike price), on or before an agreed expiry date. The underlying assets can be Shares, Indices, Commodities or Currencies.A warrant is similar to an option, giving the holder the right but not the obligation to buy underlying security at a certain price, quantity, and future time. It’s unlike an option in that a warrant is issued by a company, whereas an option is an instrument offered by a central exchange, such as the Chicago Board Options Exchange (CBOE).Warrants are transparent and transferable certificates which tend to be more attractive in medium- to long-term investment schemes. These often high-risk, high-return investment tools remain largely unexploited in long-term strategies while offering an attractive alternative to speculators and hedgers. With Mega Purpose Investment Group, due diligence and ground research is carried out before any recommendations is made to make investments on a warrant. Like I mentioned on the Penny Stocks and any other investment decisions, if doubts exist, DYOR.
INVESTING IN THE FUTURE ECONOMY
There are thousands of companies that are emerging in different sectors across the world. Just like crypto projects not all of these companies are going to be successful and gives early investors enormous gains. It requires work to pick the right stock in the right industry and invest at the right time. Moreover not all stocks are accessible to every type of investor at any particular time, this is particularly true with Penny stocks and warrants. Geographical location (region), race, nationality limits the potential of every investor particularly people in less developed and developing counties in Africa. Some of these stocks will only be available to a certain group of people when life-time gains have already been made by insiders and others.
At Mega Purpose investment Group we have selected specific industries that are in a boom for various and in which early investors are set to amass incredible investment gains. The industries will be briefly highlighted in the next few pages in this document. This includes but not limited to Biotech stocks, solar power, electric cars, Artificial Intelligence (AI) & Robotics, Cannabis Stocks and Psychedelics stocks.
FOCUS ON BIOTECH STOCKS
Biotech stocks are a polarizing area of the market for many investors. On one hand, Biotech companies have the potential to develop life-changing products that can lead to massive price upside for investors. On the other, investors are always at the mercy of FDA approvals and headlines which can expose them to significant downside risk should these companies deliver negative results. This is a big reason why biotech is one of the most high-risk, high-reward sectors of the stock market, yet there’s still a strong case to be made for adding them into your investment plans. There are several promising companies in the sector that could be good buying opportunities at this time, however for the purpose of this this investment guide we will only mention few of them.
Mordena -. Moderna has rallied over 321% year-to-date and has been holding up quite well during the recent market weakness. With plenty of cash rolling in from Moderna’s COVID-19 vaccine, the company can invest heavily in new opportunities, which is another reason why it’s one of the best biotechs to consider buying. Other stocks that should be on the watch list includes Illumina Inc. (NASDAQ: ILMN) and Regeneron Pharmaceuticals (NASDAQ: REGN).
FOCUS ON MARIJUANA
It is true that a decade ago, if you had invested in marijuana, you would have run the risk of a visit from your local constabulary or police. However as of recent, seers and market industry experts think marijuana-based stocks could be highly lucrative in coming years, mainly due to two major developments. First is the widespread legalisation across some Canada and American states. Marijuana has seen a growing use in medicine as well as for recreational purposes too. The US Food and Drug Administration (FDA) have approved a range of cannabis-based drugs for alleviating symptoms of epilepsy and treating chemotherapy-induced nausea and vomiting. Germany and the UK have also approved medicinal cannabis. Meanwhile recreational use has been approved in Canada and Uruguay, with other countries expected to follow. Marijuana companies are only just starting to appear on stock exchanges, with the Canadian stock exchange an early adopter.
Market leaders such as the Canopy Growth Corporation and Aurora Cannabis (the two largest companies) are a good start but companies that specialise in other products are branching into the market. For example, Molson Coors Brewing Company wants to be the leading vendor of cannabis-infused beverages – a segment they estimate could be worth $1.5 billion in Canada alone.
There are main three areas of investing in Marijuana Stocks
There are growers – companies that cultivate marijuana, harvest and distribute it.
There are cannabis-focused biotech’s who develop drugs.
There are associated companies, for example developing the specialised lighting equipment needed to grow it.
Other companies provide consultancy and deal with packaging and distribution.
FOCUS ON PSYCHEDELIC
Once a risky investment, the cannabis industry has established itself as one of the fastest-growing investment opportunities on the planet, with the sector outperforming the broader market already this year. For the first time, we are seeing a similar trajectory emerge for the psychedelic industry. Investors are turning their attention, and more importantly their capital, to this advancing industry for three key reasons: the global need for effective mental health treatments, evolving legislation and regulation, and widely supportive public opinion.
For the same reasons, Mega Purpose Investment Group (MPIG) have dived into the psychedelic industry as well in a bid to offer its clients the best. Early birds catches the fattest worm. We are here to create wealth through calculated investment moves that are premised on predictions of what lies ahead. Policy toward psychedelic use is continually evolving. As psychedelics begin to break into the mainstream, we will see more and more psychedelics stocks on public exchanges..
Psychedelic drug stocks to watch.
Much like early days of cannabis stocks, the nascent psychedelic drug stock group is a high risk, high reward space. Below are the top psychedelic drug stocks that investors should watch in the years ahead
Mind Medicine (MNMD)
Compass Pathways (CMPS)
Field Trip Health (FTRPF)
Cybin (CLXPF)
Numinus Wellness (LKYSF).
FOCUS ON ARTIFICAIL INTELLIGENCE (AI) AND ROBOTICS
Robotics and artificial intelligence (AI) are often associated with science fiction and futuristic visions of how we might one day live and work. While Big Tech companies are investing heavily in AI and robotics, they will not be the only winners. Investors can gain broad exposure to these long-term structural trends through funds. Unsurprisingly, some have predicted that a “robot revolution” will completely change the global economy over the next 20 years or so. Many researchers strongly believe the Robotics market is bullish. Just last year, Researchers Mordor Intelligence predicted that the global robotics market would register a compound annual growth rate of 24.52 per cent from 2018-2023 which is driven by the demand for affordable, compact energy-efficient robotics. The is growing trends in the adoption of AI and robotics in a variety of sectors which includes logistics, public environments, cleaning, inspection and maintenance, defence, medical, field robots, construction and many others.
FOCUS ON ELECTRIC CARS
Green vehicles are one of a number of growing market trends. Electric car stocks are those of companies that focus primarily on manufacturing EVs. Tesla is only the tip of the iceberg. In addition, companies that manufacture the components used in electric cars — like batteries or autonomous vehicle systems — can also be considered as part of the electric vehicle industry as well as electric cars charging stations. Conversely, the popularity of electric cars may be given a major boost by
Government legislation, EU initiatives and even significant events that the media may link to climate change. Whether you invest or not, electric cars are a fascinating market. Some of the common electric cars stocks includes NIO (NYSE:NIO), Nikola (NASDAQ:NKLA). For diversification purposes, there are plenty of options when it comes to electric vehicle ETFs, although none are pure-play investments in EVs.
Another related investment might be driverless vehicles. There is still doubt about whether these will become common but they could be highly disruptive, so early investors might make a good profit.
FOCUS ON SOLAR POWER
There is no doubt that global demand for clean energy is at an all-time high. Pressure from governments, fear of climate change, and institutions to cut the world’s reliance on fossil fuels and the search for inexpensive electricity have all generated a huge glow around the industry. Some analysts certainly expect a bright outlook for the solar industry. DNV GL’s Energy Transition Outlook 2018 report predicted solar electricity production growing 65-fold by 205015. This greatly depends on whether solar panels become standard on homes in the US and Europe – something that may have to be encouraged by intervention from governments as well as energy providers. Stocks such as First Solar Holding, Sun Power Corporation, Solar Edge Technologies, SMA Solar Technology and Abengoa.
When considering investing in the solar industry stocks, there are several options to venture in, some of them are as follows.
Solar panel manufacturers,
Installers and component and accessory manufacturers.
WHERE TO BUY STOCKS IN SOUTH AFRICA.
Putting simply, if you want to buy stock in South Africa, you will need to use a stock broker. There is no one-size-fits-all answer to the question which South African stock broker is the best. In other words, while some platforms have been in the game for decades and hold several licenses, others are relatively unproven. Provided below is the general procedures of working with South African brokers and a brief description of as handful of them. You need to be prepared to spend ample time researching your chosen stock broker before making a commitment.
GENERAL PROCEDURES FOR WORKING WITH BROKERS
Working with stock brokers had been made easier due to the advancement of technology. Days are gone in which a trader would require you to call your broker up over the phone and tell them which shares you wanted to purchase. The general procedure for majority of the stock brokers is as highlighted below.
Open an account with your chosen share broker.
Upload some ID to confirm your identity.
Deposit some funds with your debit/credit card or bank account.
Choose which shares you want to buy.
Complete the investment.
BROKERS FOR SA TRADERS Capital.com – Low Cost Broker with AI Trading Tools
Capital.com in a good choice of stock traders in South Africa. This broker offers more than 3,000 shares to trade from the US, UK, and Europe. Although the selection of shares from emerging markets isn’t huge, Capital.com makes it easy to find and trade hot stocks. One of the best things about this broker is that stock trading is 100% commission-free. Capital.com has its own custom trading platform that’s available on the web or as a mobile app for iOS and Android.
AvaTrade – CFD Stock Broker with High Leverage
AvaTrade is another top stock broker in South Africa. This platform offers trading on more than 600 share CFDs from the US, UK, and Europe. Even better, all share CFDs on AvaTrade trade 100% commission-free and the broker has some of the tightest spreads in South Africa. Part of what makes AvaTrade stand out is that you can trade most US-listed stocks with up to 10:1 leverage. AvaTrade is regulated by top-tier watchdogs in the UK and Australia as well as by South Africa’s Financial Services Conduct Authority
Easy Equities (EE)
It is an online platform which allows investors and traders to buy shares in the brands and companies they want. It is a subsidiary of JSE listed Purple Group Limited (PPE). Easy Equities is competitive as it offers relatively low fees (no monthly brokerage fees) and flexibility. It possess a strong online presence. Offers both international stocks (USA, Australia) & local stocks. Additionally it also property investment division- Easy properties, which allows investors to have fractional property share in lucrative property deals across the country. One of the set-backs with Easy Equities is that it does not have Penny Stocks or small market cap companies particularly from the US.
CHOOSING A BROKER
It might come in the life of stock investor or trader that he needs to determine which broker to use. Or you have come across a new platform that you are not sure of its services and capability. There are several metrics that you need to explore before joining the broker in question. The below list of important metrics is not exhaustive
Regulation: it is crucial that you only join a stock broker that is regulated. In fact, we would suggest looking out for reputable licensing bodies like the FCA or ASIC. Once again, if you opt for a domestic-based broker, then you will need to ensure it is regulated by the FSCA.
Low Fees and Commissions: Brokerage fees can begin to add up very quickly – especially if you are looking to build a vast portfolio of stocks. As such, be sure to assess what share dealing fees you will be required to pay. Commission free brokers like Capital.com are very few.
Tradable Markets: You then need to explore what shares the broker offers. For example, as you looking to buy shares in JSE-listed companies, or those based overseas? You can check this out before signing up.
Tools: The available trading tools vary widely from broker to broker. For example, FXVC has tools like a news feed, economic calendar, and AI to analyse your trades. On the flip side, brokers like IG support MetaTrader 4, which provides access to a wide range of advanced charting and analysis tools.
User-Friendliness: Some brokers are best suited for advanced traders, while others are conducive for those of you with little experience. You can generally get a feel for the target audience by browsing the South African share brokers’ website.
Customer Support: Having access to a dedicated customer support team is crucial. After all, you will be investing your hard-earned money. The most convenient support channel is that of live chat, albeit, some South Africans prefer to obtain guidance over the phone.