Nigerian Stock Market is Going Vertical, Impressively
The Nigerians Stock Exchange is going vertical, and that will be sustained given some developments in the financial market.
Stock market is gaining, and last few weeks performances have shown that the market is creating wealth for investors, again.
Now, NSE capitalisation has crossed the Rubicon, growing strongly to more than N13 trillion mark.
It is not about the recent growth, though. It is about financial market outlook. Where are Nigerians investing their money, really?
The golden rule hasn’t changed: buy low, sell high – that is how to make profit in equities trading.
This is not a good time to be subservient, there is only one way out of economic twists and turns covid-19 brought to our door steps – Investment!
However you plan to do it. The thing is; you must do it to stay afloat.
After this pandemic, investment is not going to be a buzz word as it used to be. People would have to make their money works in mining fields.
It will cost you more to operate savings accounts. It means the value of your money reduce anything you save.
This time, you have learn how to build wealth without exerting energy. You can’t afford to live with yesterday strategy and attitude today, the economy has been reset.
To some people, this is an opportunity. Others, well – complaints don’t buy goods in the market.
Let me tell you what is going to happen. People would start investing in order to close gaps in their finances.
Why? Companies are re-negotiating salaries, which is the best way to avoid layoffs.
You have choice of investment windows but I tell you, real return is negative in the fixed income market now.
That is to say, it is better to spend your money to buy whatever you want today, because by tomorrow prices must have increased more than what your investment could cover.
Here is the drill. Lotteries won’t be a good resort. Why? Operators would get greedy because of their recent experiences.
Perhaps, your profile may not even fit into lotteries bets. It is dicey, then.
What would you do?
Buy into real estate? Quite unlikely accept you have deep pocket. Do fixed income? Your expected returns would not cover inflation rate.
Do some sort of betting? You have 90% chance that you would lose.
It is time for you to do stock…Yes, stock market investment. Here are some tips from Sigma Securities Limited.
How do you buy shares?
Before you own shares of companies of your choice, you need a stockbroker recognised by the Nigerian Stock Exchange. (You can request for list of stockbrokers from MarketForces Africa)
When you identify a stockbroker, you will have to register.
What is the actual cost of buying and selling shares through stockbroking firms in Nigeria?
According to Sigma Securities Limited, the cost of buy or sale of shares on the Nigerian Stock exchange through Stock Brokers in Nigeria range between 1.49% and 1.86% for buy mandates and between 1.82% and 2.19% for sell mandates.
How can I open a stockbroking account? Here is what Sigma Securities Limited says.
According to Sigma Securities Limited, a stock broking firm that has helped a lot of Nigerians that are actively trading stock in the market, you need to complete a Central Securities Clearing System Limited (CSCS) Account Opening Form.
The CSCS administers the Financial Market Infrastructure (FMI) for the Nigerian Capital Market.
CSCS ensures the transfer of shares and other forms of securities from seller to buyer and its settlement (the payment).
When you identify a stockbroker, you will be asked to fill a form. For example, you need to fill the Sigma stock broking account opening form.
Do you want to know why? This is done to obtain necessary Know Your Customer (KYC) information about the client.
The form is submitted with necessary documentations, which will be advised on the form. Now, most of the stockbroking firm now have online portal where you can as well submit your details,
When can I begin to buy and sell shares on the Nigerian Stock Exchange?
Once the stockbroking account has been opened and all necessary Know Your Customer (KYC) documentations have been submitted.
The client can fund their trading account by transferring funds into Sigma Securities Limited’s bank account.
What does owning the shares or stock of a company mean?
Think of your stocks as interest in a company that you own, rather than just simple financial elements to be traded.
In its explanation, Sigma stated that stocks are much more than a piece of paper for selling and buying.
When you own some, you become a member of the collective ownership of that specific company you invested in.
You are a shareholder now, it means you own a fraction of the company.
You are granted a right to earnings and a claim on assets by virtue of owning a company’s stock.
You may even have a voice in determining the company’s leadership and policies if your stock includes voting options.
Should I invest into more than one company shares?
Risk should technically be diversified. Sigma advises is that you should be sure to invest over an array of different stocks.
The stockbroking firm stated that investing in a single type of stock is very dangerous. For example, if you’ve only invested in one stock and it fails, you’ll lose everything.
Which company shares should I buy into?
Having patience, while being familiar with each company and tracking market trends are beneficial to helping you succeed in the market.
Your main goal should obviously be to profit, and profiting means learning the ins and outs of the marketplace.
You could be earning profits from wise stock market investments sooner than you think.
Do a thorough research into the companies and look over financial statements in order to better understand the weaknesses and strengths of each company’s stocks.
By doing this, you can carefully consider whether you need to own certain stocks.
How can I become a successful investor in the Nigerian Stock market?
To establish yourself as a successful stock investor, create a solid plan with specific details and map it out in writing.
Whether you are investing in the Nigerian stock exchange through stock brokers in Lagos or a stock brokers in Abuja, the strategies in your plan should be about when you will buy and when you will sell.
It must also include a clearly defined budget for your securities.
This way you will know that you are spending only the money you have allotted for investing and choosing wisely with your intellect and not your emotions.
Can I buy the shares of the company I work for?
Use restraint when purchasing the stock of the company you work for. While purchasing company stock might be prideful, there is a lot of risk involved.
Although, if employee shares can be purchased at discount, it might be a good bargain and worth purchasing.
Advice for a new investor in the Stock market
Sigma Securities Limited has an advice for you. Keep your stock investment plans simple when you are beginning.
The firm thinks it can be fun and exciting to pick a buffet platter of stocks but as a beginner, you need to start off small.
This ends up saving you a whole lot of money in the end, Sigma Securities advises.
The firm would like you to consider seeking out the opinions of a financial adviser on occasion, even if you plan to oversee your investment yourself.
Experts are of the view that a good professional won’t just give you great individual stock picks.
They can help you clarify important strategic investment points, such as your overall goals, your preferred timeline, and your tolerance for risk.
Then, you can formulate a solid plan together based on this information. Don’t allow investing to make you oblivious to other profitable investing opportunities.
Sigma Securities explained that there are many other wise investments exist, such as bonds or mutual funds.
It’s advisable to diversified investments to protect your wealth.
The key point in Sigma’s view here is that anybody has the ability to invest within the stock market, but only some have the knowledge and desire to research in order to earn the highest profit.
Take the time to learn more about the stock market and practice with cheap stocks before you build your portfolio.
Keep these tips in mind so you can start investing today.
Nigerian Stock Market is Going Vertical, Impressively
