- Fortescue Metals Group is a leading producer of iron ore in the world.
- It is rapidly scaling operations in the green energy sector through its Fortescue Future Industries division.
- Fortescue is a dividend-paying stock, which is appealing to many investors.
Fortescue Metals Group, an Australian iron company, is one of the largest iron ore producers in the world. It also stands as one of the world’s lowest-cost iron ore producers.
Fortescue Metals Group is publicly listed on the Australian Securities Exchange (ASX: FMG). You can purchase Fortescue stocks online if you wish to diversify your portfolio through exposure to the mining industry.
Read on for a step-by-step guide on where and how to buy Fortescue shares in Australia.
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Fortescue, established in 2003, is one of Australia’s biggest miners. It owns and operates integrated operations across three iron ore mining hubs in the Pilbara, Western Australia, which are connected to the five-berth Herb Elliott Port and the Judith Street Harbour towage infrastructure in Port Hedland through the world’s fastest heavy haul railway.
Fortescue also manages Fortescue Future Industries (FFI), a 100 per cent renewable green energy and industry company. Together, Fortescue and FFI aim to establish a global portfolio of green hydrogen and green product operations to become global leaders in the renewable hydrogen sector.
Fortescue aims to be a carbon-neutral company by 2030. It is gradually decarbonising its mobile fleet by shifting to hydrogen and battery electric energy solutions to achieve this aim. Fortescue’s FFI division has also entered into a memorandum of understanding with Airbus to implement green hydrogen as a fuel in the aviation industry.
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Step 1: Select a broker
You can buy or sell Australian-listed securities with an online broker. Many online trading platforms are available in Australia, but there are a few things to consider when choosing a broker.
It shouldn’t be complicated to trade in shares. Compare various platforms and sign up on one that is easy to use.
An online trading platform charges you a small commission for facilitating your trades. This is known as brokerage fees, and the amount charged by different brokers will vary.
Some trading platforms charge you lesser brokerage when you make more trades in a month, and others may charge you an additional fee if your account isn’t active for a few months, but you continue holding shares in your account. Therefore, selecting a platform with competitive pricing for your investor profile is important.
Company analysis and research
You shouldn’t make investment decisions based on your gut feeling. Instead, go for a platform with a strong research and analysis section that can help you make informed decisions by providing you with regular market updates and other relevant data.
Step 2: Fund your trading account
Once you sign up on a trading platform, you must fund your trading account before you can buy shares. It can sometimes take up to two to three business days for your funds to clear before you can start trading.
Step 3: Set your budget
Shares are volatile, and the value of your stock can go up and down without warning. When buying shares, you must consider the risk you are willing to take and only spend money you can afford to lose.
Step 4: Invest via an ETF or in shares
An ETF is a basket of shares that tracks the performance of a broader market sector. Owing to diversification, investing in ETFs is safer than investing in an active share.
ETFs with exposure to Fortescue include Franklin Liberty Systematic Style Premia ETF (FLSP), First Trust Asia Pacific ex-Japan AlphaDEX Fund (FPA), and SPDR Portfolio Developed World ex-US ETF (SPDW).
Step 5: Set up an order
You can choose from some of these widely available order types to customise when and how much of each share should be purchased.
A market order is an order to execute the trade at market price. Such orders are executed immediately, but the price you get at order execution might not be the same as the one offered when you placed the order.
A limit order only gets executed at your specified price or better. This could either be the maximum buying price or the minimum selling price.
A stop limit order combines two order types – the stop order and the limit order. With a stop order, you instruct the broker to buy or sell stock when the price hits $X. On the other hand, with a limit order, you tell the broker to buy or sell a specified number of shares at $X or better.
So, if Fortescue is trading at $18.83, you might place a stop limit to buy 100 shares of Fortescue, up to $25 when the price hits $20.
Here, $20 is the stop level, which triggers a limit order of $25. It means the order will be triggered when the stock price reaches $20 (the stop), and it can still be bought for less than $25 (the limit).
A stop order or stop loss is used to buy or sell a stock at the market price once it has traded at the stop price (which is the price nominated by you). Once the stock reaches the stop price, the order becomes a market order and is executed at the next available market price.
Step 6: Place your order
Once you have selected a broker and decided on the type of investment, you can place an order.
Step 7: Monitor your investment
Whether you buy shares in a company as a long-term investment or to benefit from price fluctuations, it’s important to keep track of the company’s performance and its stock price to make informed decisions.
Fortescue is a dividend-paying company. To track Fortescue’s performance, keep an eye out for any company reports and announcements. Monitor its financial fundamentals and share price to know whether it’s performing up to your expectations. If not, you may want to rethink your investment.
Besides its mining business, Fortescue has also forayed into the renewable energy sector, and it’s worth tracking the trends and patterns in both industries to predict the performance of your stock broadly.
If you are buying Fortescue shares, you may also want to compare the performance of its competitors, such as Rio Tinto Group (ASX: RIO), Vale S.A. (NYSE: VALE), and BHP Group Ltd (ASX: BHP).
Disclaimer: The views expressed in this article are those of the writer’s alone and do not constitute financial advice. Advertisers cannot influence editorial content. However, Finty and/or the writer may have a financial interest in the companies mentioned. Finty is committed to providing factual, honest, and accurate information that is compliant with governing laws and regulations. Do your own due diligence and seek professional advice before deciding to invest in one of the products mentioned. For more information, see Finty’s editorial guidelines and terms and conditions.