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investing 101 with EasyEquities

Have you been thinking of starting your first investment? The good news is it’s super simple with the Capitec banking app and EasyEquities widget.

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When you think about investing, business people in stuffy suits in a busy office might come to mind. What if we told you investing is something anyone can do? And it’s the way South Africa’s up and coming are making their money work for them. You don’t need to have a finance degree to get started. You have direct access to the widget through the Capitec banking app where you can start investing from as little as R5.

You’ll be able to buy shares on both the South African and US stock markets, and save 20% on the commission you would pay when you make an investment. If you are already an EasyEquities user, it’s easy and secure to link your profile on the Capitec banking app.

We've partnered with EasyEquities so that we can help you improve your financial life by providing simple access to easy investing.

Investing is for anyone

Capitec client Yolande de Beer, 33, says she was looking for an alternative to opening a normal bank savings account or investing through a financial services provider.

“I had absolutely no investing experience at all. After doing research online, I found some interesting information and reviews on EasyEquities. As I already have the Capitec banking app, I simply used the EasyEquities widget to invest in a company that was affected by the COVID-19 pandemic as the share prices were cheaper. I believed it would pay off in the long run.”

And it did for Yolande. “I’ve seen growth of more than 7% on my investment so far,” she says. “It also means I have immediate access to my money, if need be, unlike most high-interest savings accounts that have a notice period for withdrawing funds.”

Understanding investment terminology

Before you dive into the world of investing, it’s important to understand the 4 different types of investments available to you through the EasyEquities widget on the Capitec banking app.

Equities

What they are: Also known as stocks or shares, equities are the most simple and well-known type of investment available. In basic terms, equities allow you to invest in actual companies.

How they work: When you buy equities, you’re essentially buying a tiny portion of a company, such as Capitec, Dis-Chem, Pick n Pay or Vodacom. If the share price goes up, you have the opportunity to sell and potentially make a profit. However, if you sell after the share price has gone down, you could lose a percentage of the amount you initially invested.

ETFs

What they are: Exchange traded funds, or ETFs, are a collection of companies or shares either made up of different industries or isolated to a single industry or sector. ETFs are a great way to invest. They’re relatively cheap to buy, easy to invest in and offer the diversification benefits of unit trusts. The difference between an ETF and an unit trust, however, is that ETFs are listed on the stock exchange, so you can buy or sell them at any time of the day. Unit trusts, on the other hand, are not and prices are only set at the end of the day.

How they work: You can buy an ETF with a single transaction, which gives you exposure to many different companies. Because a single ETF holds shares in different companies or industries, your risk is spread. You can also choose whether you’d like to invest in South African or overseas companies.

ETNs

What they are: Exchange traded notes (ETNs) are essentially unsecured corporate debt, which means you aren’t buying a collection of assets like you would with an ETF.

How they work: An ETN works like an IOU from a bank. This note indicates what you’ve bought and puts you in line for a potential payout when it matures. With an ETN you won’t own anything but will hold the debt, in the same way a home loan works. The difference between what you paid for the note and sale price of the underlying commodity is your profit.

Cryptocurrency

What they are: Cryptocurrencies are digital currencies like Bitcoin and Ethereum. They are secured by cryptography, making it virtually impossible to counterfeit. You can buy or sell them on cryptocurrency exchanges and in some instances use them to pay for items or services.

How they work: EasyEquities gives you access to 10 cryptocurrencies, which helps to diversify your investments. In a nutshell, you can buy tokens on the EasyEquities platform and they are then kept for you by DCX10. This means your cryptocurrency tokens are kept secure off the internet, which puts them out of reach of hackers. Just keep in mind, though, the value of cryptocurrencies fluctuate quite radically, which makes them a risky investment.

Simplify your life. Invest with EasyEquities

“Being able to use my Capitec banking app to access the EasyEquities widget gives me complete control over my funds and means I can cut out the middleman,” Yolande says.

Her advice to newbie investors is simple: “Do your research before you decide to invest. COVID-19 has had a harsh effect on our economy and on our own budgets, but we can take advantage of current low share prices to invest in local companies. Take that leap of faith. It was worth it for me.”

Use the Capitec banking app and get access to investing in shares through EasyEquities. You can invest as little as R5. Investing made simple, convenient and affordable.

*This EasyEquities user story does not constitute financial advice. The user was also given an EasyEquities voucher for their participation.

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