Yes, but the broker account charges you monthly and/or annual fees, which eat into your share gains each year too. That is where I arrived at the R60 000 mark. Also, buying multiple shares for a few thousand rand at a time is going to cost you transaction fees. If the fees are going to be more than 1% of your annual gains, then how do you plan to outperform good ETF's unless you are lucky to pick the right shares? Especially if you have less than 6 shares to cover that risk?
You make a good point about the dividends though, but I still feel that the fees are money "left on the table" that should go in your pocket. Can a random share really beat a good ETF for <R60 000 invested?
I have a bank account, and it costs be R99 to have it. So spending R50-75 a month to have a trading account, I just see as part of the deal. And its not a big deal to me.
On smaller deals, the cost of making the investment is around 2-3% of the overall amount when we're looking at amounts of R3,500ish (getting less on bigger amounts). If I pick a stock that fails to crack that in a year, I have really failed.
For me there is no luck involved. I don't just pick random stocks from a variety of markets to spread my bets. I spend typically alot of time researching potential investments. I have about 13 in my portfolio as I mentioned, but i have around double that in my watchlist.
I have a strategy and goals. The goal is to outperform the Satrix40 on an annual basis, because if I cant do that, then I may as well just invest in Satrix40 and stop worrying about research etc. The strategy covers which shares i'll invest in and why, based on research. It also covers when I abandon a trade, because they are not all sweet and their are some pitfalls.
It took me alot of time to get to a place where I feel comfortable with what I'm doing (as I literally did start out just randomly picking stocks to 'invest' in, and paid the price accordingly) but I feel good about doing the research, and getting reward for my efforts (or learning from mistakes). Overall I'm achieving my goal, and I think i demonstrate that it can be done successfully on smaller amounts, but ja, it's not necessarily 'easy' i guess.
Edit: I've been trying to check some numbers to check personal performance against goal, and over 4 years the satrix40 has had, I believe, 80% growth. Which is really awesome. I have had a little bit over 100% growth. Which is really, really awesome. And it started with R3,500. I more than cover my costs with dividend payouts, and reinvest the rest. The 'cost' of the trade is just that - the cost of having a chance to make a return. So i don't even worry about that, as i aim to cover it on every trade/investment.
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I'm def not in that league.. and don't think I will be... (for a while)