INVESTING IN STOCKS AND SHARES by Esomchukwu Ojiako

Investing in stocks and shares can be a way of securing our financial future. DEFINITION OF KEY TERMS SHARE: Simply put, a share is any of the equal parts into which the money of a company is divided. People who own these shares are called shareholders of the company. DIVIDEND: A share of profit paid to shareholders of a company according to amount of units held. STOCKBROKER: A person or organisation that buys/sell stocks for investors.They are the only ones authorized to trade stocks on the floor of the Nigerian Stock Exchange. STOCK EXCHANGE: An organized market where stocks/shares of companies are publicly bought and sold. HOW MUCH IS NEEDED TO START? A lot of people do not invest in stocks because of “lack of funds”. However, with as little as 1,000.00 NGN [One thousand naira only] one can start investing in stocks. This shows that lack of funds cannot really prevent a lot of people from investing in shares. This point was made clearer by Robert Schuller when he averred that “If you think your problem is finance, think again.” BENEFITS OF INVESTING IN STOCKS AND SHARES 1. IT ENCOURAGES SAVINGS: Investing in stocks encourages investors to save. Money hitherto spent on less important things are gathered by the investor and invested in more companies or used to increase unitholding in companies in which they already have shares. 2. INVESTMENT CAN SERVE AS COLLATERAL: Stocks can be presented as collateral when borrowing loans. It is even preferred as collateral by banks and other financial institutions to landed properties since they can easily sell them and recover their funds within four (4) days unlike landed properties. 3. NO EDUCATIONAL QUALIFICATIONS NEEDED: Unlike some other businesses in which one needs some level of education to venture into, investments in shares needs no educational qualifications. It is easy to understand and calculate, besides your stockbrokers are there to guide you. 4. THE INVESTOR CAN GROW RICHER: Investment in shares makes the investor grow richer. This is because aside the fact that he makes more money when the prices of his company’s shares go up, he gets more units of shares when his company declares bonus. He also gets his dividends which he can either use to solve financial problems or re-invest to make even more money. 5. NO SPECIFIC CAPITAL REQUIREMENTS: There are no specific capital requirements needed to make investments and as such you can invest N1,000.00. You can also invest N1,000,000,000.00. The list is not exhaustive as there are other benefits derivable.