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Investing in stocks or shares has become more popular since the conclusion of bank consolidation in Nigeria. The Nigerian stock market is rated among the best in terms of returns worldwide and this is evidenced by the average annual returns on investment.

Research shows that forty-two of the world’s four hundred and fifty billionaires earned their wealth through stocks and shares and most of them, including the world’s first, second and fourth richest men, keep their money through stocks and shares.

You buy ownership of a company when you buy the company’s common stock. This gives you the opportunity to increase your net worth through dividends, bonus issues and capital appreciation. Every investment decision is sensitive to interest rates.

WHAT IS AN ACTION?

A share is a certificate that represents a percentage of ownership of a company and is expressed as a number of shares. The ownership percentage will obviously depend on the number of shares outstanding, therefore a share represents your interest as an investor in a company.

21 TIPS FOR A SUCCESSFUL EQUITY INVESTMENT

1. Do your research before you invest.

2. Know when to buy. Every stock has its high and low periods. Therefore, you need to know exactly when to buy the stock and make a profit.

3. Know when to sell. You know when to sell the shares you have bought. Do not hold stocks longer than necessary.

4. Know how to use company news in the media to buy the best shares or sell the purchased shares.

5. You need to understand how earnings per share affects stocks in positive and negative ways.

6. Don’t invest blindly. You must 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 bonuses as its primary objective. When choosing a stock, consider the bonus and the share’s history of price appreciation.

8. Know when to enter the market, when to hold, and when to exit the market. Don’t let greed burn your fingers.

9. Don’t sell a stock because the price is going down, sell because you know why the price is going down.

10. Never buy a stock after the close of registration. It will not be a wise thing to do.

11. Avoid sentimental stock buying. In the stock market, you have to discard sentiment if you want to be successful in your trade.

12. As an investor, you must have both short-term and long-term investments.

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 that you are not willing to hold for a long period. Make sure that all the stocks you invest your money in are stocks that you can hold for a long period of time.

15. Have an exit strategy. Don’t be greedy about it. Get out when you’re supposed to. Greed has caused many people to burn their fingers.

16. Always make sure that the investment you are making at each point allows you to sleep with your eyes closed at night. Be sure to take a calculated risk when investing in the market.

17. Always seek expert advice when investing

18. Never follow the crowd to invest. Make sure the stock you are putting your money into is worth it. It’s not every public offering you should buy. If you must buy, then you must know why you are buying.

19. Stop dealing with untrustworthy stockbrokers.

20. Learn how to use the company’s financial report to study the performance of its shares.

21. Patience is required for successful capital investment. Do not be in a hurry to earn quick money so as not to burn your fingers.

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