What is a share?
A share is used to describe a part ownership of a company. This means you become a shareholder or a part owner of that company – you are buying a portion of the company’s assets and profits.
The value of your shares can either go up or down as it is usually affected by the company’s performance, the condition of the market as well as sentiments from investors.
Buying shares is not what one should venture into without proper knowledge of how shares work especially in a country like Nigeria with several uncertainties.
To help you make the right decisions, below is the list of things to do before making any share purchase.
1. Open a Central Securities Clearing System account
The CSCS is the clearing and settlement system for all securities transactions in Nigeria, and it is managed by the Central Securities Clearing System Plc
All investors who want to buy or sell shares in Nigeria are required to have a CSCS account. The CSCS account is like a digital wallet that holds your shares.
2. Choose a stockbroker
A stockbroker is a licensed professional who helps you buy and sell shares. You can choose a stockbroker based on their fees, reputation, and experience.
3. Fund your account
Once you have opened a CSCS account and chosen a stockbroker, you need to fund your account. You can do this by transferring money to your stockbroker’s account.
4. Place your order
After funding your account, you can now place your order for the shares you want to buy. You can do this through your stockbroker or through their online trading platform.
5. Monitor your investment
After buying shares, it’s important to monitor your investment regularly. This will help you make informed decisions on when to sell or hold your shares.
In conclusion, investing in shares could be an important strategy in your pursuit of financial security, although they also her risks.
Owning shares in companies leading companies like Facebook, GTBank, Dangote Group, MTN, and Nigerian banks, could be helpful in protecting your money from inflation and taxes, and maximising your investment earnings.