The ABC of stock market investments for a beginner


  • What criteria needs to be undertaken to pick stocks when investing for the first time?
  • Which companies have shown a positive trend and could be analysed as good investments?
  • What should your course of action be when you are a beginner in the stock market game?

The stock market can seem like a big bad world when you do not know where to put your money on. There are several factors that can help one determine what the best stocks to invest in are, right from the market conditions to the new developments in the stocks of a company, to the general industry trends, besides the world economy. Let us try and understand where you can put your money on this season, safeguard you from unnecessary risk in this seemingly confusing scenario, and what can fetch you the best results?

What are the best NZ stocks, how can choose where to invest?

While the NZ market has witnessed recovery from the effects of the pandemic, so much so that it is reportedly returning to pre-COVID-19 levels, it is essential to ensure that the shares that you choose are not only doing well currently but also have a good outlook for the near future.

Air New Zealand (NZX:AIR)

While one might argue that the travel sector was one of the most affected during the pandemic and that this may not be a stable stock to invest in, the fact of the matter is that this is one of the stocks that has seen the highest level of recovery since the start of the pandemic. Comparing the trend from March when the lowest cost of the share was NZ$0.80 to the NZ$1.94 recorded in the month of June, shows a growing trend. So, if you are of the belief that travel stocks will eventually rise, this may be the best time to buy them at discounted prices. On June 21, Air New Zealand traded at NZ$1.580, down by 2.7%, at the time of writing.

Spark New Zealand (NZX:SPK)

Another stock on the list is Spark New Zealand because the company has operations that have remained largely unaffected by the pandemic. Offering Internet, Pay Television, fixed line, and other services, they have done good business in the recent past. The simple reason for this is that with half the world working from home, there was need for flawless internet and phone connectivity. Research reveals that the company has not just been able to recover its pandemic-related lull but is even presenting a higher price than before. It is currently offering a dividend yield of 4.82%. On June 21, Spark New Zealand traded at NZ$4.710, down by 0.63%, at the time of writing.

PGG Wrightson (NZX:PGW)

PGG Wrightson is another stock that has witnessed growth and stability in the half-yearly result out in February 2021. The revenue had increased by 6% to NZ$499.3 and EBITDA was recorded at NZ$42.1M, which is higher by 21% than pcp. The Net profit earned by the Company was NZ$18M. They declared a fully imputed dividend for 12 cents for each share for its shareholders, owing to the strong performances seen in the livestock and retail business sectors. The P/E ratio or the “Earnings per share” offered by the Company was recorded at 19.440.

On June 21, PGG Wrightson Limited traded at NZ$3.400, up by 0.59%, at the time of writing.

Sector-wise, it is expected further in the upcoming months is the technology sector. Not only they are lesser affected by the pandemic as compared to other sectors, they are also indeed on the way to pre-COVID-19 level recovery, making for ideal investments. There are several stocks you can select from going by their latest market performances and results declared.

Read now: What is a Penny stock? Can it prove to be a good bet for investors?

What stocks should I invest in 2021 as a beginner?

If you’re a beginner and confused about the stocks to start investing in, there are a few basic pointers that need to be kept in mind. You will need to check which company offers a stable business and a good dividend yield, as that would be one sure way of making money from the stock. One must keep an eye on the P/E, the market cap as well as market capitalisation of the particular stock too.

Also read: Why does dividend matter to investors? A peek at the related NZX stocks

How do I know what shares to buy? How do I go about the process?

Another tip that could come in handy while buying stocks is selecting them through channels that do not charge commission. Besides this, it is ideal to buy shares if the company is offering over 24,000 shares. It is further essential to check whether the channel is registered with a regulatory such as CySEC, ASIC and FCA. One should look for stocks that are prompt in releasing dividends, the knowledge about which can be sought through various mediums.

When you are beginning your stock market investment journey, you will come across a lot of confusing views. All one needs to do is stick to the Government-made announcements and trust only certified sources for the most updated information, so that accurate decisions can be made.

Also read: 5 stock stories creating a buzz on NZX - TLS, GSH, PCT, AIR, TGG



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