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For many, financial figures and graphs are difficult to read. They can be confusing and don’t seem to have any relevance to us. With our Markets 101 we hope to provide a brief description and summary of some of the key market indicators.
If you are interested but not sure what it all means perhaps get in touch with us
Shares, stocks, equities are all synonyms for ownership or a portion of ownership in a company. In the context of the chart, equities is referring to companies listed publicly, you can buy shares in those companies through a stock broker if you have the capital to build your own portfolio. Buying 1% of the listed companies shares means you own 1% that of that company.
In the table you will see the price of the share and percentage change of the share price. Stock brokers, asset managers and traders what these prices closely with the hope to buy low and sell high. Unit Trust funds buy shares and build portfolios on behalf of a collective group. Economies of scale make it affordable for people to diversify while investing in a unit trust and they have the expertise of team of investors who stick to an investment mandate.
Indices the plural of index reflects a market or a market segment by grouping companies, sectors or even an entire stock exchange. The JSE All Share Index (ALSI) is a bucket of all the listed companies in South Africa and is just one of many indices fund managers look at.
These indices give us an aggregated view of the market it is tracking. Indices often form the benchmark for stock brokers, traders and asset manager. Each unit trust fund has a benchmark it is trying to exceed it is linked to their mandate and the risk versus return they are promising their investors, these benchmarks are often pegged to an index. Equity fund managers want to show that they have been above the aggregate of the equity market.
A commodity is a basic good used in commerce that is interchangeable with other goods or commodities of the same type like oil, wheat, gold etc. It can be thought of as the raw goods used in the production of other goods and services. The average person cannot do much with Crude Oil but we all now the value of petrol and many of the other by products it produces.
Commodity prices affect the cost of the goods and services we consume. Tracking the price of a commodity can give us insight into the possible future price of the product we will consume. If the price of wheat changes we know we can expect a change in cereal, bread and any other product that uses wheat.
For some people who are economically minded this is a simple concept but for many of us we don’t also make the connection between the raw materials and finished product we purchase.
This one we should all know, it refers to money. It is a store of value that can be traded. Each currency in the world has a value within the country and a value to the rest of the world, these exchange rates among other things reflect the demand of a particular currency and value it holds.
Growmatter would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All market information and forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Growmatter doesn’t bear any responsibility for any losses you incur as a result of using this data. Further no information presented is to be construed as advice or guidance on how to invest or manage your financial affairs.
Should you require any assistance please contact one of our qualified professionals.