As an investor you need to keep informed of the wider market and its movements beyond the JSE.
What happens elsewhere in the world has an effect on our market, so keeping on top of international events can give your portfolio a serious advantage.
But only if you know what to look at, and where to look at it…
You see, movements beyond our borders have the power to move our market.
So being able to harness that power can give you a glimpse into the day’s movements before JSE even opens.
How do you do this?
Let me show you…
Your secret Index weapon
It all starts with an index.
An Index is basically a group of shares measured and weighed together, with the purpose of acting as a sample of the whole market.
The shares chosen in the index are usually companies that have the largest market capitalization in that specific market.
Instead of looking at all the shares in the specific market, we look at the index, and use that as a measure of the market performance.
Knowing this, the next step is to then gauge specific indices as they’ll give you a good indication of what will ultimately move our market.
The Indices you need to follow
Before the JSE opens the market is followed, starting in North America in the West, and heading into the East, Asia, and then Europe.
The North American Indices, the S&P and the DOW Jones, are the two most important Indices to look at.
This is because of North America’s economic and financial status, and how they react and or close will affect the sentiment of the markets that open once it closes.
After North America closes, Asia is the first key economic area to open. And after Asia, South Africa opens, then Europe, and then back to the Americas.