So earlier today one of the smartest, hard-working, most driven people I know asked me to invest in a ponzi scheme. I wondered why on earth anyone would invest in any such scheme. So here is a short guide to some of the options you may want to consider. I am obsessed with the Nigerian Stock Exchange as most people know. So stocks are a key part of my portfolio. According to Nairametrics, the definition of a stock is a unit of a share of a company that is traded on the floor of the Nigerian Stock Exchange NSE.
How To Invest In The Nigerian Stock Exchange Market | Wealth Result
It is also often referred to as a share. Every company has shares which the owners lay claim to. When you go to register a company at the Corporate Affairs Commission CAC you typically say your authorized share capital is N1m made up of 1m ordinary shares of N1 each. This means your initial capital at the start of your company is N1million represented by those shares. Whilst the value of your capital may increase over time, your shares remain the same till you decide to increase it again and register same with the CAC.
When the shares are listed on the floor of the NSE they are tradable as stocks meaning people can buy or sell them. Generally divide your investments into long term investments and speculative investments when trading on the NSE. The better you are at understanding a companies annual report, market conditions and growth trajectory; the better you will be at trading.
But if you are just getting started investments like GTB, Nestle and Dangote Cement are considered very stable for the long term. These would be a good start as you get to know the market.
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Chapel Hill, Pro Share and Cardinalstone publish detailed daily reports on the markets which you should make a habit of reading to enhance your knowledge of the stock market. Also speak to stockbrokers to get ideas about their best picks. Treasury Bills. Treasury Bills are short-term debt instruments issued by the Federal Government through the Central Bank to provide short term funding for the government.
They are by nature, the most liquid money market securities and are backed by the guarantee of the Federal Government. They are usually issued for tenors of 91 days, days and days at the primary market auction held fortnightly by the Central Bank of Nigeria. The interest rate stop rate at the auction is not fixed but fluctuates based on demand and amount offered by the apex bank. You do not pay tax on treasury bills and yield is normally higher when compared to fixed deposit. But they are harder to get rid of than fixed deposit if you need money back before the maturity period.
You can buy treasury bills from your bank.
What You Need To Start Investing In The Nigerian Stock Exchange
Fixed Deposits. A fixed deposit is a type of short-term financial investments sold by banks to its depositors. A depositor invests in a fixed deposit when he deposits his money with a bank in exchange for interest for a predetermined period. Fixed deposits can often be for one month, three months, six months and one year.
In return for fixing your money with the bank for a fixed period, the interest paid on fixed deposits is always higher than the interest that the bank pays on a regular deposit. Fixed Deposits can be done in naira or dollars, unlike treasury bills. Show related SlideShares at end. WordPress Shortcode. Full Name Comment goes here.
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