Investment in shares or equities has become more popular since the conclusion of banking consolidation in Nigeria. The Nigerian stock market is rated among the best in terms of returns around the world and this is evidence in the average annual returns on investment.
Research shows that forty-two out of four hundred and fifty billionaires in the world got their wealth through stocks and shares and most of them including the first, second and fourth richest man in the world maintain their money through stocks and shares.
You buy ownership into a company when you purchase the common stocks of the company. This gives you the opportunity of increasing your net worth through dividends, bonus issues and capital appreciation. Every investment decisions are sensitive to interest rates.
WHAT IS A STOCK?
A stock is a certificate representing a percentage of ownership in a company and stated as a number of shares. The percentage of ownership will obviously depend upon the number of shares outstanding.So, a share represent your interest as an investor in a company.
21 TIPS FOR SUCCESSFUL EQUITY INVESTMENT
1. Investigate before you invest.
2. Know when to buy. Every stock has its low and high periods. Therefore, you must know when exactly to buy the stocks and make profit.
3. Know when to sell. You know when to sell the stocks you have bought. Do not hold the stocks more than necessary.
4. Know how to use the company news in the media to buy the best stock or sell off the stocks bought.
5. You must understand how the Earning per share affects stocks positively and negatively.
6. Do not do blind investment. You should understand and know why you are investing in the stocks you have chosen to buy. You must be sure of what you are doing.
7. Your investment in the stock market should have capital appreciation and bonus as your major goal. When choosing a stock consider the bonus and price appreciation history of the stock.
8. Know when to enter the market, when to hold and when to exit from the market. Do not let greed make burn your fingers.
9. Do not sell a stock because the price is falling, but sell because you know why the price is falling.
10. Never buy a stock a date after the closure of register. It will not be a wise thing to do.
11. Avoid sentimental buying of stocks. In the stock market, you must rule out sentiment if you must experience success in your deal.
12. As an investor, you must have both short- term and long-term investment.
13. You must diversify your investment. By doing this, you are spreading your risk.
14. You must have this principle of not buying a stock you are not willing to hold for a long period. Make sure every stock you stake your money in, are stocks you can hold for a long period.
15. Have exit strategy. Do not be greedy about it. Exit when you are suppose to. Greed has made many people to have their fingers burnt.
16. Always ensure that the investment you are making at every point will allow sleeping with your eyes close in the night. Ensure you take calculated risk when investing in the market.
17. Always seek expert advise when investing
18. Never follow the crowd to invest. Be sure the stock you are putting your money into is worth it. It is not every public offer you should buy. If you must buy, then you must know why you are buying.
19. Stop dealing with stockbrokers that are not trust worthy.
20. Learn how to use the company financial report to understudy the performance of your stocks.
21. Patience is required in the success of equity investment. Do not be in a hurry to make quick money so as not to have your fingers burnt.