If you’ve heard about investing in and buying stocks but aren’t sure how to get started, you’ve come to the right place. Investing in the stock market can help you increase your wealth and financial security.
Though there are risks involved, purchasing shares can provide the foundation you need to secure your financial future.
What are shares?
A share is a single unit of ownership in a company, firm, or corporation. It is also known as ‘equity’ or stock.’ It is essentially a certificate that grants the holder a stake in a company. Each stock represents a percentage of the corporation’s ownership.
Who is a shareholder?
A shareholder is a person who owns stock in a company. As a shareholder, this individual is subject to capital gains (or losses) or dividend payments as a residual claimant on a company’s profits. This means that the shareholder benefits if the company does well, and vice versa.
How to Buy shares in Nigerian
Here is a step-by-step guide to purchasing shares in Nigeria:
1. Open a Nigerian brokerage account.
2. Fill out the Central Securities Clearing Systems (CSCS) account application form.
3. Fund your brokerage account.
4. Once you’ve decided what you want, make a trade offer.
As a beginner, you’d want to make the most of what you have. Stock trading can be an emotional roller coaster.
You’re overjoyed when the stock price rises and you see your investment making money. Sometimes stock prices fall, and your happy face falls with them.
It is critical to understand the risks associated with the stock market. It is best to diversify your portfolio, as advised. This means that you buy stock in various industries and companies rather than putting all of your eggs in one basket. It is also critical to thoroughly research a stock with the assistance of your stock broker before purchasing it.
Other Ways You Can Buy Shares in Nigeria
Other ways to purchase shares include:
1. Buy stocks Online: Investing in stocks online is inexpensive, but there is little or no guidance; you are only charged a flat fee for each transaction. You would also have to do the heavy lifting yourself, which
means you would be solely responsible for investment decisions, making it the most time-consuming option. Before you begin, it is a good idea to research the top trading sites on the internet.
2. Mutual Funds: Mutual funds are a slightly more secure way to invest in stocks. In this case, your fund manager does the heavy lifting and purchases a group of stocks on your behalf. Although you do not own the stock, you do own a portion of it.
3. Hedge Funds: A hedge fund is similar to a mutual fund in that it invests in securities. Both funds combine all of their investors’ funds into a single actively managed fund. The difference is that hedge funds invest in complex financial instruments such as derivatives, and they frequently project that these excellent investments will outperform the market. Because these funds are privately held companies, they are not as regulated as mutual funds. They are riskier, but they are expected to yield a higher return.
4. Investment Clubs: The advantage of joining an investment club is that you get a lot of information at a low cost. Meeting with the other club members, on the other hand, can be time-consuming. Before you can start investing, you may need to put some money into a club account. Again, it is best to do extensive research before joining any club.
Investing in stocks is an excellent way to double your money. Most financial advisors recommend purchasing stocks based on your financial goals. Once you’ve carefully assessed the risks and diversified your portfolio, all you have to do is wait for your investments to grow.
Featured Image Source: Businessday.NGGot a suggestion? Contact us: editor@connectnigeria.com
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