Best Brokers to Trade Nasdaq Shares & ETFs in South Africa
Unlike most general public thinks, investing in the Nasdaq Exchange from South Africa is a simple process. We have displayed [at the beginning of this article] a list of the best brokers to trade Nasdaq Shares available to local clients [For those readers who are in a hurry!].
Can I Buy Nasdaq Shares from South Africa?
Many South Africans ask us if it is possible to buy Nasdaq stocks being a non-US citizen. Stocks are regulated by US law, yet, you do not have to be a US citizen to trade in the US stock market; in other words, you may buy Nasdaq shares being a South African citizen. No specific laws prohibit non-US citizens from investing in the different US stock markets. Many investment firms cater to international clients.
Nasdaq: The most popular Tech Stock Market for investors in South Africa
Based in New York, the Nasdaq is the most extensive Stock Market with a Technological focus globally, where shares of the titanic Big Tech American corporations trade.
Below we list [Some of] the most popular stocks of the tech giants:
Apple: The company that revolutionised the mobile business by creating the iPhone needs no further introduction.
Facebook: Another one that doesn't need an introduction: The largest social network worldwide.
Amazon: The most popular eCommerce platform in the United States and the world.
Netflix: Application of series and movies with the largest number of subscribers worldwide.
Google (Alphabet): The Well-known tech giant, we only need to mention that Google's shares are called "Alphabet" on Nasdaq.
Tesla: Elon's vision.
NVIDIA: The graphic chip powerhouse has been one of the better performers in 2020 in the entire tech sector.
The previous is an unfinished list of the most well-renowned shares; there's a significant number of internationally recognised companies and brands available to invest in at the Nasdaq. A rounded way of investing is to invest in the Nasdaq-100 index, which groups the top 100 companies listed at this Exchange.
Nasdaq-100: The Index that Best Expresses the Tech Exchange
The NASDAQ-100 started in 1985. It is a modified capitalisation-weighted index-based, meaning that the constituent stocks are ranked by:
a) their market capitalisation (often shortened to "market cap"), or
b) their stock price by its number of shares outstanding, divided by the total market capitalisation of all the constituents in the index.
A market-cap weighted index can also be considered a liquidity-weighted index since the largest-cap stocks tend to have the highest liquidity and the most significant capacity to handle investor flows.
NASDAQ created two separate indices: the proper NASDAQ-100 index, which consists of Industrial, Technology, Retail, Telecommunication, Biotechnology, Health Care, Transportation, Media and Service companies, and the NASDAQ Financial-100, which consists of banking companies, insurance firms, brokerage houses and mortgage companies.
Investing in a financial instrument that replicates the NASDAQ-100 Index is (the best?) an excellent way to invest in a good portion of the North American Tech giants.
Nasdaq Trading Hours
Regular trading hours for the US stock market, including both the New York Stock Exchange and the Nasdaq Stock Market, are 9:30 AM to 4 PM Eastern time on weekdays (except stock market holidays). On early-closure days, typically right before or right after a market holiday, regular stock trading ends at 1 PM ET. In terms of South African Standard time, then, Nasdaq Trading hours range:
from 4:30 PM to 11 PM during Winter Time (November to April), and
from 3:30 PM to 10 PM on 'Daylight Saving' Time (rest of the year).
What is the minimum amount to invest in Nasdaq Shares from South Africa?
Unlike most general public thinks, the answer to this question is that many stockbrokers do not have a minimum deposit (or a tiny amount of cash); which means no minimum amount. Also, to gain more clients, many brokers do not charge a commission to acquire American companies' shares.
How to Open a Trading Account to Invest in the Nasdaq Exchange from South Africa
Opening an investment account with an Online Broker is a process that is completed online and requires:
First, choose the broker that best fits your investment goals.
Upload an ID and a proof of address (electricity, water bills, etc.), through the Broker's App or via email.
Make sure to choose the right base currency of the account. With some brokers, changing it once you open the account can be painful. Trading Accounts may be based in US Dollars (USD), Euros (EUR), Pound Sterling (GBP), Swiss Franc (CHF), Australian Dollar (AUD) as the base currency. Practically all of them offer the option in US Dollars or Euros.
Once the Broker has approved the account, it's time to deposit cash. The depositing and withdrawing money methods are usually Credit Cards, Bank Transfers or eWallets (PayPal, PaySafe, Skrill, SafetyPay, Neteller, among many others). The available options to deposit funds will depend on each Broker. A vital fact to mention is that all of the Brokers presented above allow you to use a simulator on their platform; they allow testing their Demo account, which is Free. In other words, you can open a Demo account, try the platform, and then decide whether to deposit money or not.
But I am not an Investment Banker: it easy to invest?
Online Brokers allow investing in the Nasdaq Exchange straightforwardly through optimised apps that grant easy and fast access to the US financial markets. Most platforms resemble a social network or any other phone app: They are designed so that the investor can learn and start trading very quickly, without the need for much prior knowledge. To buy shares of, for example, Apple, or to invest in a financial instrument that replicates the NASDAQ-100 index, you have to:
open a trading account as explained before,
Search for "Apple" or "NASDAQ" on the Broker's Trading platform, and
press the "Buy" button.
And, done, you are officially investing in Nasdaq assets. If you wish to move forward, check out the four options that we have presented initially, which are, in our opinion, the best ones to deal with in South Africa.
The Nasdaq Market is by far the largest Tech Stock market in the World. When investing there, you are technically investing with the US Dollar, the most sought after currency. If you are going to place your savings anywhere, the bottom line is the #1 Economic Superpower perhaps it's not the wrong place.