It’s a fact that roughly 80% of forex traders with European online brokers lose their investments over time.
The reason, says ThinkMarkets director and co-founder Faizan Anees, is lack of education in the basics of trading, investment – and saving.
ThinkMarkets is a new arrival to the South African online brokerage scene, though it’s been around since 2010 and is licensed in Australia, Japan, Europe and South Africa. Last month the company was named Best CFD Provider at the City of London Wealth Management Awards.
“If you look at the costs of buying and selling stocks through many of the traditional brokers in SA, particularly the hidden costs, they are often way out of line with other parts of the world,” says Ridwaan Moolla, ThinkMarkets regional director for SA.
“We want to democratise investing by offering low costs and very targeted education and research that will make it possible for far more people to participate in the financial markets.
“A relatively small proportion of South Africans participate in the markets. We want to change that,” he says.
The language of investing is often intimidating for newcomers, adds Moolla. For example, few people understand the difference between an endowment or a retirement annuity.
Financial service providers are partly to blame for this arcane language, and people have a tendency to stay away from what they do not understand. But ThinkMarkets wants to change this and has a concise library of videos and articles on the basics of trading and investing, which you can access here.
Educating South Africans in financial markets
“Our education is designed to explain these concepts to traders in very simple terms, and make sure they understand the risks. Our objective is to make all our clients successful traders or investors, and we do that by teaching them trading strategies intended to reduce risk, and expose them to unconventional ways of making money in the financial markets.
“We find better informed clients get much better results in the markets, and this is showing up in many different studies.”
A top-down research approach
The other lacuna that prevents broader inclusion in the financial markets is access to quality research, something ThinkMarkets has solved by hiring a team of top analysts, headed up by Kearabilwe Nonyana, manager of equity and derivative sales operations in South Africa. Nonyana was previously at IG and JP Morgan, before making the switch to ThinkMarkets about a year ago.
“One area where we want to truly differentiate ourselves is in the quality of our research.
“We don’t try to cover the entire market, but will focus on the top 60 stocks as ranked by market cap, and we offer a more limited value analysis on the next 40 stocks, so we cover the top 100,” he says.
“Our research team takes a top-down approach, starting at macro level where we look at [the] economic reality of companies and the markets in which they operate, whether in SA or offshore, and then we go down to micro level, looking at management, risk factors, quality of earnings, and consistency of growth over five years. We also value companies against their peers.”
ThinkMarkets publishes its share selections for the week, and also provides daily market commentary, supplemented with international research from its overseas offices.
Perhaps the big news for traders and investors looking to squeeze the most out of the market is ThinkMarkets’ costs: 0.25% of the investment amount, with a minimum of R30. That applies to JSE share purchases and sales.
There are zero commissions when trading contracts for difference (CFD) shares and indices. There are no withdrawal, admin or other hidden fees.
This is certain to rattle some of the incumbents in the market accustomed to fees as high as 4% if you add the various hidden costs.
A CFD is a type of derivative product that mimics the price movement of an asset, such as a stock or currency pair. You don’t ever own the underlying asset, but you do get the benefit of price movements in the underlying asset.
The ThinkMarkets mobile app, ThinkTrader, in addition to providing a secure and robust trading engine, gives clients access to key company ratios, growth margins and other comparative stats. “Our research is designed for the retail investor; though for those who want a deeper dive, we have resources available too,” says Nonyana.
ThinkMarkets offers trading across three platforms: MetaTrader 4 or 5 for more experienced traders, and the ThinkMarkets mobile app for those who want the convenience of trading on the go. The ThinkMarkets app is currently available for mobile phones, but will soon become available for desktops.
A trading strategy is only as good as the trading infrastructure used to execute it.
Every millisecond counts, especially for high-frequency traders and those executing time-sensitive strategies.
This requires a broker with high-end technology to provide the best bid and ask prices and execution within milliseconds. ThinkMarkets has partnered with Equinix, the world’s largest trading ecosystem, to ensure that its technology is among the fastest and most secure in the world. The Equinix association gives it a front row seat at two of the world’s biggest financial markets, London and Hong Kong.
ThinkMarkets offers clients the following:
- Tight spreads, low- to zero commissions and a variety of account types, tailored to client preferences and needs;
- A company licensed in Australia, UK, Japan and SA;
- The ability to trade across multiple asset classes, including CFDs on currencies, CFDs on equities, cryptocurrencies, commodities, indices, futures and now JSE stocks;
- A proprietary mobile trading app that allows clients to trade and manage their positions from their smartphones. The trading engine uses the latest technology to provide the best pricing and execution speed;
- Client funds are held in segregated trust accounts;
- Zero commission for CFD shares both locally on the JSE and international shares, indices and crypto currencies;
- Investment in all JSE shares, exchange-traded funds and exchange-traded notes with brokerage at 0.25% minimum R30.
- Premium clients investing over R250 000 receive exclusive benefits and pricing.
To find out more or sign up, click here.
Join ThinkMarkets in its upcoming webinar on Tuesday, April 13 at 6pm. It will show you how investing works and help you on your journey to wealth creation. You can register to attend here.
Brought to you by ThinkMarkets.
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