Buy Alcoa shares - how to invest in Alcoa shares in South Africa

Alcoa is an American metals company, the second largest producer of aluminium in the world. In addition to producing primary aluminium, it is one of the world leaders in bauxite mining and alumina production.

Charles Hall founded the company in 1886. The founder graduated in chemistry from Oberlin College. He developed a cheap way of producing aluminium - through electrolysis. Aluminium smelters still use this method as their main one.

The company is headquartered in Pittsburgh (Pennsylvania, USA).

Alcoa has operations in 31 countries. The company operates in all major phases of industrial production: technology, mining, refining, smelting, refining and recycling. Revenues from the mining and processing of aluminium and alumina account for three quarters of Alcoa's total revenues. The company's other activities are precision castings and fasteners used in industry and aviation. It produces aluminium structures, siding and cast aluminium products, including car wheels, as well as aluminium. The company's products are used in industry, aviation, automotive, commercial transport, packaging, construction, oil and gas and defence.

You can find out more about the company on the official Alcoa website
You can find out more about the company on the official Alcoa website

Market experts give a good outlook on the feasibility of investing in the company. According to the forecast of Roy Harvey, CEO of Alcoa, global aluminum consumption in 2021 will increase by 7% compared with the previous year. It will reach 67 million tonnes, the highest growth since 2014. International Aluminium Institute (IAI) Secretary General Miles Prosser also noted that the organisation expects aluminium consumption to grow by at least 6% in 2021. Consumption in China is expected to grow by 5 per cent year-on-year in 2020, while consumption outside China is expected to grow by 10 per cent through recovery growth.

As of the date of this writing, the company's share price stood at $31.57, up 399.96% YoY.

Consider options for investing in Alcoa shares in South Africa.

Information on Alcoa's current share price
Information on Alcoa's current share price

How to invest in Alcoa shares in South Africa?

Alcoa shares are traded on the New-York Stock Exchange (NYSE), where they are listed under ticker AA.

In addition to the American site, Alcoa shares may also be found on the Bolsa Mexicana de Valores (BMV); Frankfurt Stock Exchange (FSE); Berlin Stock Exchange; Stuttgart Stock Exchange (SWB), as well as the Swiss, Austrian and London stock exchanges.

Alcoa shares are included in calculation of several indices, including: Dow Jones US, Dow Jones Mid-Cap Value, NYSE Composite, S&P/TSX Global Mining.

To invest in Alcoa shares in South Africa, you need to find a broker that works with the above-mentioned exchanges and register on the online trading platform that this broker provides for work. 

You can invest in shares using the dividend method or, if your starting capital is small, you can trade CFDs.

Select "AA" ticker to find Alcoa shares on the platform

How to choose a reliable broker? 

When choosing a broker, check whether the broker meets the following requirements:

  • whether the broker has a licence from the regulatory authorities entitling it to engage in brokering activities;
  • availability of a professional website with all the necessary information;
  • availability of feedback for consultation;
  • available trading conditions with a wide range of trading instruments;
  • availability of technical indicators to analyse stock price fluctuations;
  • access to free training materials;
  • the speed of responding to requests;
  • low service fees;
  • convenient methods for deposit and withdrawal of funds.

The broker will give you access to an online platform through which you can make investment transactions.

Online trading platform

An online trading platform is software developed by a brokerage company.

Online investment platforms are designed to make it easier for the average user to access the investment process. Now everyone, even those who live in a remote province of South Africa, has the opportunity to invest. The minimum capital in this case is $10.

The platform offers the user free training as well as a number of tools to help analyze a listed company.

It is a fully digital product which is a powerful alternative to the classic investment process and once you have tried it, you will not want to go back to the classic method of investing offline.

You only need internet access to access the platform. However, many platforms are also available on the mobile version, which means you will be able to carry out all transactions from your mobile phone by downloading the appropriate app. You will have all the investment-related information in your pocket - stock prices, updated charts, investment terms and conditions, etc.

The investment platform provides you with a comprehensive set of graphical functions and charts, which will help you to visualise price fluctuations and to identify patterns in these fluctuations. With the help of the platform you will quickly learn how to make rather complex investment transactions and analyse the stock market.

Alcoa share trading platform online
Alcoa share trading platform online

Methods for investing in Alcoa shares

You can make money from stocks in many different ways. It all depends on how much experience you have and your willingness to take risks.

There is the option of dividend income, where you invest a certain amount of money in a company and receive a guaranteed, previously contracted amount of income. The amount of this payment is determined by the shareholders' meeting and can be of varying amounts. Sometimes companies even pay out up to a third of the net profits to their shareholders. Each company has its own policy on these payments.

Alcoa pays dividends, but the last payment was made in 2016.

The dividend method of investing, while considered the safest method, does not generate quick profits. This method can easily be called a passive income option, as you do not need to monitor the stock market every day and be an active participant. You simply invest in a company with the expectation of dividends in the future. Of course, every sensible investor will analyse the performance of the company in which they are going to invest to see whether the company will pay out dividends.

It is worth remembering that paying dividends is a right of the company, not an obligation. If the year ends with a loss, management may decide not to pay a dividend. Growing companies may also choose not to share profits with shareholders, but leave all profits to grow the business. On the other hand, if things are going well, the business is growing and flourishing, then investing in shares of such a company will be profitable and may yield a good return in the future.

Buying Alcoa shares
Buying Alcoa shares

Another investment option is the use of derivatives, so-called CFDs.

Contracts for Difference are simple, inexpensive contracts that allow you to trade a wide range of financial instruments by speculating on the difference in the value of the underlying trading instrument or security. A CFD deal lasts from the time you enter into it until the time you close it.

Here you must be able to forecast the value of a stock. How accurately you predict the rise or fall of these stocks will determine your profits. That is, in this case you can make a profit even if the value of the stock drops.

The main advantage of CFDs is the leverage, which allows you to increase your investment. Thus, even having a minimum amount to invest, you can earn good profits. You should bear in mind that using leverage, on the other hand, does increase the risk of your transaction. Therefore, it is well worth understanding how it works before using such a method.

By trading CFDs you can make a profit even in a few minutes, but this method involves active participation in the market, constant monitoring and analysis. 

Information on the trading conditions for Alcoa shares
Information on the trading conditions for Alcoa shares

How to buy Alcoa shares?

Once you have chosen your broker, register on the online trading platform.

Registration on the platform is very simple, takes a few minutes and requires no special knowledge. Just click on the option "register" on the broker's website, fill in all the fields of the registration form and click "confirm". You will get an email notification about registration on the online trading platform and a request to confirm the email - do it. After this simple procedure, your account is ready.

Go through a simple registration process
Go through a simple registration process

Once you are logged in, open an account. The system will offer you two account options, the demo account and the live account. The demo account is a test account, which is solely for training purposes. On the demo account you will see an amount of $10000 - this is fictional money which you will not be able to cash out. Use this money to make a transaction and analyse your own actions. 

A demo account is a good way to test the system, practice and test your skills without risking any real money.

Choose a trading account
Choose a trading account

A real account is activated by making a deposit of at least the minimum amount set by the system. Usually the minimum deposit amount is only $10. You can make a deposit using a credit card or well-known payment systems, just click "Deposit" and choose a convenient option from the list offered by the system. You will be able to withdraw money from your account using the same options. 

Top up your account online
Top up your account online

How to invest successfully?

Investment activity, above all, involves a certain amount of risk. Too bad, but absolutely no one can give you a hundred-per-cent guarantee of future prices of any given asset and even the forecasts of world-renowned market experts have been wrong, and market giants like Alcoa have gone bust and declared themselves bankrupt.

Nevertheless, by studying the stock market on a regular basis, analyzing stock price fluctuations and following news which somehow or other affect the activity of a company you want to invest in, you will be able to develop your own trading strategy.

Remember that trading is not a game of chance. You need to have a basic understanding of how the stock market works, you need to understand certain patterns and processes, and you need to keep learning and deepening this knowledge. There is a whole section on the platform with video tutorials, from the basics of investing to how to use sophisticated indicators for technical analysis. In addition, the internet offers many external sources for training. 

Remember that share prices are also affected by a number of external factors, which can include political processes at home and around the world, domestic economic laws and macroeconomic market processes, as well as phenomena such as man-made disasters and natural calamities.

Keep track of the activities of the company in which you are investing. Keep an eye on the direction of its activities, analyze whether the product or service it provides will continue to be in demand by consumers.

If you persistently study such processes, follow market trends, follow the behaviour of certain companies. Over time, you will learn to analyse and predict the possible growth or decline in the value of a company's assets. This will allow you to make successful transactions in the investment market and grow professionally as an investor.

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The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose