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

How to buy Microsoft shares

Microsoft is a global giant in the field of computer technology. It is a famous manufacturer of software for PCs, smartphones, game consoles, etc. It is included in the S&P 500 index (505 American companies with the largest capitalization). In 2020, the corporation was announced as the most expensive US public company.

Microsoft was founded in 1975 by Bill Gates and Paul Allen. It is headquartered in Redmond, the United States. The number of Microsoft employees is over 140 thousand people.

The company's software is sold in 80 countries and translated into 45 languages.

Microsoft closes its fiscal year in June. At the end of 2020, revenue amounted to $ 143.015 billion. It is 14% more than in 2019. Its sales were growing mainly due to cloud technologies, corporate services, personal computing products, GitHub service (joint development of IT projects). Thus, in the Microsoft Intelligent Cloud segment, annual revenue increased by $ 5.24 billion compared to 2019.

The company's net profit also increased by 13%, that is, to $ 44.28 billion. The market cap for the first three quarters of 2020 amounted to $ 1,597 billion (against 1,068 billion in the same period of 2019).

How to buy Microsoft stocks
How to buy Microsoft stocks

How to invest in Microsoft shares

Shares are securities that give their owners the right to manage the issuing company and receive a portion of the profits. They are a great source of variable income.  You can buy shares or start CFD trading on specially organized financial markets - stock exchanges.

Having bought a share or a package of them, you can handle them as you like. The choice of the method depends on how much you are willing to risk, what kind of experience you have and, finally, on your capital.

The more experience and capital, the more opportunities, for example, you can use several ways to make money at the same time:

  • Long term storage

By purchasing securities, you profit from their growth. This long-term investment is similar to a deposit in a bank. When you buy shares of one or several companies that will definitely grow in the price for several more years, you will receive a small percentage. It is a safe method, but it is only suitable for investors with large capital - income from long-term storage can be small.

  • Dividends

It is the guaranteed income of the investor, which does not depend on the value of the purchased shares. The amount of dividends is approved by the meeting of shareholders, and they are paid once a year (sometimes, on a quarterly basis). The disadvantage of this method is that each company has its own dividend policy. Some companies immediately declare what percentage of net profit or free flow they are willing to pay investors, and others either do not support this strategy at all.

  • Online shares trading

Trading Microsoft shares on the stock exchange means you will buy or sell securities. Most often, stock quotes change in a very short time. Therefore, in order to get profit from the sale of shares, one must not only constantly monitor price movement charts. It is also important to understand how the financial market works. After all, prices depend on many parameters:

  • current market situation;
  • the political situation in the country and in the world;
  • the financial situation of the company, etc.
Information about the Microsoft shares
Information about the Microsoft shares

Microsoft shares Investment Platform

Microsoft shares are traded on the NASDAQ exchange under the MSFT ticker. The initial IPO took place in 1986. At that time, the company issued 300,000 shares with a starting price of $ 21 per share.

Microsoft Corporation shares are included in a large number of stock indices, which include: S&P 500, S&P 100, Dow Jones, Nasdaq 100, Nasdaq Comp. other. The inclusion of shares in the calculation of the most popular stock indicators of the American stock market makes the shares of the corporation extremely popular for investors.

Microsoft Stock Investment Platform
Microsoft Stock Investment Platform

How to start investing in Microsoft shares

Individuals can be engaged in shares trading via a broker.  These are specialized companies that have received a brokerage license. At the same time, the client can interact with the broker as it is convenient for him:

  • Trade yourself. In this case, the investor only opens a brokerage account but performs all operations independently, which means that he manages his own money. All transactions are carried out directly by the trader.
  • Entrust the management to a specialist. Then a specialist will deal with the sale and purchase for you. His actions and powers are limited by the contract. The investor, on the other hand, may not go into the details and simply receive income.

How to register

Once you find a reliable online broker, you need to register on its site to be able to trade Microsoft shares. This procedure is fast and simple, and you will be guided on the site on what to do. You will have to provide a user name and an email address.

Registration on the Investment Platform
Registration on the Investment Platform

How to open a demo account

A demo account is available right after the registration. It allows free training with virtual money. A demo account provides beginners with the ability to test their skills and strategies in an environment close to real trading.

How to open a real account

Every broker has both training and real accounts. A real account opens access to the trading terminal. But you will need to pay the minimum deposit to activate this option.

How to open a demo or a real account
How to open a demo or a real account

How to fund a deposit

All modern brokers try to make trading as convenient as it is possible for its customers. As a rule, you will find a list of payment options on every site and will be able to find the one that suits you best.

Minimum deposit amount

This sum is not fixed and varies depending on the platform. Usually, the minimum deposit amount starts from $10.

Deposit replenishment
Deposit replenishment

How to withdraw money

The mechanism of money withdrawal is the same as deposit replenishing. Brokers provide a list of channels for your convenience. The only thing to remember is that you need to be a verified trader to be approved for money withdrawal.

Security of Microsoft share Investments

In the stock market, Microsoft shares have experienced a strong period of growth since 2014 (+ 260%), and their market valuation exceeded $ 1 trillion for the first time on April 30, 2019 (with the price of a share at $ 130).

Microsoft stocks have long been viewed by investors as a cyclical asset, meaning they rise in value during economic growth and decline sharply during downturns, much like technology stocks. 

However, over the past few years, the company has diversified significantly and no longer provides a pure technology stake but is now more like a revenue stream that is storm-resistant and regularly pays dividends even during downturns.

The transformation, which has been underway since 2014, makes Microsoft a high-paying, active company that can afford to reallocate funds among its investors, unlike other tech companies who tend to reinvest the money.

How safe is it to invest in Microsoft shares

There are several reasons to invest in the company shares:

  1. After the completion of the business model change, the corporation finally began to grow revenue and earnings, surpassing all Wall Street's forecasts. According to experts, the financial indicators will only grow in the near future.

  2. The cloud business is gaining momentum: revenues of the Azure corporate service grew by 116%, exceeding the growth in the previous quarter, which indicates the formation of a trend. At the same time, the potential of cloud platforms is far from being exhausted. The company is also investing in other promising areas - virtual reality, self-driving vehicles, artificial intelligence, Big Data, etc. 

  3. The fact of continuous improvement of the main Microsoft products is also important - Windows, Office, and other solutions for private and business users are popular worldwide.

  4. Microsoft is one of the largest corporations in the world, the company ranks third in the American market in terms of capitalization. It is included in the S & P500 and DJ30 indices and also pays dividends steadily - the current yield exceeds 2.5%. It makes Microsoft stock a good option, even for a conservative investor. 
Microsoft earnings calendar
Microsoft earnings calendar

How to safely invest in Microsoft shares online

Now that we have analyzed the theory, it's time to see how it all happens in reality. How can you safely buy your first share and become a full-fledged participant in trading? You will have to go through several stages:

  • Training. There are a lot of useful and free materials that help a novice investor learn about the work of the stock market, understand in more detail its basic concepts and profit-making schemes.
  • Set a goal. Any new undertaking, especially a financial one, needs a specific goal. Therefore, first, you need to formulate a strategy based on why you need the money, as well as set the minimum level of income and the period for receiving it.
  • Choose an online broker. It will provide you access to the stock exchange via the trading terminal. Moreover, the broker will let you use leverage, analytics and technical indicators.
  • Open a demo account. The training account completely copies the work of the brokerage, but at the same time, it gives you a chance to place an order without any risks.
  • Form a strategy. After you have evaluated your strengths and understood the theory, choose a strategy. You will find a variety of various techniques like stop loss and others.
  • Build an investment portfolio. It is not advisable to invest all funds in one company. Distribute funds among shares of several companies.
  • Buy your first stock. Now that stock transactions can be carried out online, it is not even necessary to install serious software on a computer. Your broker's mobile app or universal platform is enough.

My investments in Microsoft shares are protected

Since Microsoft has a monopoly in the software market with almost no competitors, its shares have a number of advantages:

  • The company is gaining more and more growth in business applications throughout the history of Microsoft. It is because it has reached a new level of its development, implements modern strategies and develops technologies.
  • The corporation constantly opens up new opportunities for those who are ready to cooperate. Microsoft is the market leader in operating system production.
  • The revenue is constantly increasing.
  • Company‚Äôs shares can provide constant income.
  • Payouts are constantly increasing.

FAQ:

Can you buy Microsoft shares?

Any individual (investor) can purchase ordinary Microsoft shares. But it can be organized via online broker platforms as individuals have no direct access to stock platforms. Shares can be purchased from any broker that works with the NASDAQ exchange.

Microsoft's share price had clearly risen since March 2009, when it was at its lowest level at $ 14.85 per share. By mid-January 2020, Microsoft's share price reached $ 162. Microsoft's share price has risen more than 10 times in a decade since its lowest in March 2009.

Individuals can purchase or trade shares only via intermediaries. These are online brokers that have access to stock and forex markets.

The current price for one share is $ 225.95.

Yes, you can start your stock investment with one share only.

Since 2004, Microsoft has regularly paid quarterly dividend yield, which has grown steadily from year to year. In the last quarter of 2020, investors received $ 0.56 for one Microsoft share. This sum is likely to continue to grow in the coming years.

You can become a Microsoft investor being located in any country, South Africa included. You will only have to select a reliable broker for this activity.

In the stock market, Microsoft shares have experienced a strong period of growth since 2014 (+ 260%), and their market valuation exceeded $ 1 trillion for the first time on April 30, 2019 (with the price of a share at $ 130).

There were slight share drops after the company reported a decrease in revenue growth. But all of them were very temporary and the shares quickly gained their value back.

During 2020, Microsoft shares are up 35.2%. The company is supporting a lot of technical projects like virtual reality and cloud technologies. These are the main growth drivers of the corporation.

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