Buy General Motors shares in South Africa
Online trading is a fairly "young" investment trend, which is nevertheless becoming increasingly popular in today's world. Accessibility from anywhere in the world, as well as accessibility in terms of resources, as you only need to have a laptop (or even just a mobile phone), access to the Internet and a sum of just a few dollars - these factors are certainly attracting a new generation of potential investors. In addition, the vast theoretical base that you will have access to online will help you get started in your investment career, even if you had no idea how it works before.
Regardless of the minimum amount you can invest, you can invest in any major company, even the world-renowned ones. Today we are going to look at such an option, namely how to invest in General Motors stock in South Africa.
Why General Motors?
General Motors is the largest American automobile manufacturer and one of the largest companies in the world.
The company was founded in 1908 by William Crapo Durant. The founder managed to get rich running a plumbing company. He invested all his money in the rapidly developing car business. Before that, Durant had invested heavily in the production of horse-drawn carriages. In the most productive years (1886-1890 gg.) Production managed to produce 100 thousand carriages.
In the next few years, Dupont bought out a number of companies, such as the Buick Motor Car Company, Oldsmobile, Cadillac and Oakland. All in all, the businessman bought more than three dozen small U.S. companies that were connected with car production. Thus, he could control practically the whole chain of vehicle production.
Thus, the foundation of the whole chapter in automotive history was laid not only in the United States, but all over the world.
By 1910, over 12 000 copies of General Motors vehicles had been sold. However, unlike other carmakers, who tended to invest all of their profits into development, Mr. Durant had his own approach, which was embodied in the inclusion of more than 30 small car brands into General Motors over 10 years. By 1927, the company was steadily among the three largest US car firms, and even the Great Depression, which began in 1928, did not hit the welfare of the concern, which began to form new jobs in those years to somehow help the government cope with the crisis.
The 20s and 30s saw an emphasis on foreign markets, with the concern buying out the British firm Vauxhall, and by the end of the decade was able to acquire the German Opel. The Australian company Holden was also bought out. Large purchases and a strengthened technical line enabled General Motors to become one of the largest car manufacturers worldwide (not just in the United States). By the early 1930s, the manufacturer was producing 1.5 million units each year.
By 1978, the company included more than 50 subsidiaries that were developing models for civilian and military use.
At the end of the first decade of the XXI century, GM's financial condition strongly deteriorated.
The economic crisis of 2008 shook the company's fortunes, and it declared bankruptcy in 2009. Bankruptcy procedure was decided to conduct with involvement of the U.S. Government. The government was to finance a $30 billion budget deficit. The Government got control over 60% of the company in return.
At the end of 2010 GM held a public offering which became one of the biggest in history. During the offering, the U.S. and Canadian governments, who became major shareholders in the 2009 bankruptcy, sold their shares for a total of $23.1 billion.
The main shareholders as of May 2011 were the US Treasury Department (35.5%), the United Auto Workers Union (UATWU) (10.3%), Canada Gen Investments (9%).
As of 27 January 2016, 1.5 billion shares had been issued and the company had 447 registered shareholders.
The company currently sells its vehicles in 192 countries around the world. The products are manufactured in facilities located in 35 countries. In 2020, the company had a headcount of around 155,000 employees.
The company posted a net profit of $2.846 billion for the fourth quarter compared to a loss of $194 million a year ago.
As of the date of this writing, GM stock stands at $56.15, up 187.27% from the same period last year.
How to invest in General Motors shares in South Africa?
General Motors' main trading venue is the New York Stock Exchange. Investors were able to trade in the US corporation's securities in November 2010. On the NYSE, they can be found under the ticker GM.
General Motors stocks are also traded on other exchanges. In particular, they can be traded on: Hamburg, Frankfurt, Berlin, Munich, Hanover, London and other European stock exchanges.
To invest in General Motors stocks in South Africa, you will need to find a licensed intermediary - a brokerage company that works with the aforementioned stock exchanges.
When choosing a broker, make sure that the broker has all the necessary documents for brokering in the stock market - a license and relevant permits.
Pay attention to the broker's reputation by reading the reviews of experienced traders and market experts.
Pay special attention to the online trading platform, which the broker offers for work. It is the platform that gives you access to all operations on the stock market, so you should understand all functions and the tools provided by the platform should make your trading convenient and comfortable.
Brokerage companies charge a certain commission for their services - it is important to find out the amount before you start trading.
Investing in stocks can be done in different ways, either through dividend income or by actively trading derivatives. It depends on your starting capital and your objectives.
The dividend method of investing involves buying shares in a company and then paying out dividends. The dividend payout depends on the company's internal policy and is determined at a general meeting of shareholders. General Motors pays a dividend of 4.5-5% per year every quarter.
The dividend method of investing is suitable for those who invest a fairly large amount of capital and whose main goal is to keep the money from depreciating. You won't make an immediate profit, but this method is relatively safe and can be compared with passive income.
If you have a small initial capital and your goal is to generate short-term profits, then the trading of financial derivatives, so-called CFD is suitable for you.
A CFD is a financial instrument (also known as a Contract for Difference), which is similar to an index or stock. A CFD allows you to trade the underlying asset even if you do not own it.
The price of a CFD is the price of the asset. If the price of the asset increases, the price of the CFD also increases. That means that you can make a profit even if the price of the stock drops, as long as you have predicted it. An important difference is the absence of exchange fees and other disadvantages of stock trading. CFDs allow you to take advantage of leverage, which is not usually available in stock trading. CFDs have become very popular over the last few years.
The advantage of trading CFDs is that you can use your leverage to increase your start-up capital.
How to buy General Motors shares in South Africa?
As mentioned above, your first step towards buying GM stock will be to find a reliable broker that works with the NYSE or other exchanges on which GM stock is traded.
The next step is to register on the broker's online trading platform. The registration process is not complicated, and you will be able to handle it easily. Just find the "register" option on the broker's website and once you click on it, a registration form will open up for you. All you have to do is fill in your details (username and email) and then confirm the registration through an automatic link that the system will generate and send to your email address. By clicking on that link you will confirm your registration. Now you will have access to all the functions of the online trading platform.
You will have two account options - demo and live.
The demo account is a training version of the real account. Here you will see $10,000, which is dummy money that the system automatically credits to the demo account, so that you can learn how to trade on the platform. A demo account works just like a real account, except of course you will not be able to withdraw money from this account. Use the demo account to test your skills and then go ahead and open a real account.
A real account is real money, so to activate it, simply fund it with at least the minimum amount allowed on the platform. Normally it is only $10, while the investment amount is even less - from $1. Making a deposit is easy. Simply click the "deposit" button, and you will see the deposit options offered by the system. The most popular option is using your bank card, but you can also use online payment systems.
The withdrawal options are the same as for deposits. The minimum withdrawal amount starts at $2.
How to invest successfully online?
Investing is a complicated process. Unfortunately, no one can give you a hundred percent guarantee about asset prices or instructions on how, when and what to invest in. You need to have at least a basic understanding of the stock market and the ability to analyse the processes that affect securities in one way or another. The platform has a separate 'tutorial' section with video tutorials, which explain the basic theoretical information about the platform, the use of indicators for technical analysis, multiplier functions etc. in a clear and simple way. We also recommend using external information sources.
It is not unreasonable to follow the company's news in order to understand the trends - whether the company plans to expand its activities or line of products or services, whether it follows innovations, whether the company's products (or services) are in demand, etc. The platform has links to the latest company news with reliable sources of information, which is extremely convenient.
General Motors has been and remains one of the market leaders in the automotive industry. In the future, the American automaker is likely to become more active in developing car model lines that have been well received by customers around the world. In particular, the Chevrolet Lacetti range of cars. It is possible that after some time, this model will become one of the main vehicles that allow General Motors Company to earn a significant profit. The development of this line could lead to a significant improvement in the expert outlook for the stock.
The company is actively developing, introducing all new and improved car models to the world. US automaker General Motors has announced its intention to phase out petrol and diesel-powered passenger cars and sports cars by 2035 in favour of electric cars.
The company also said it will provide 100 per cent renewable energy to power its US operations and global facilities by 2030. This is five years ahead of the company's previously announced plans.
General Motors is a great choice to invest in. Invest in one of the world's largest companies and let your operations succeed!