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The Beginner’s Guide to Investing in the Nigerian Stock Market by Ikenna C. Nwaiwu
Instead of you working for the money, the money is working for you. Here are more reasons to invest in the stock market
1. The stock market gives your higher returns than investing in bonds, treasury bills, certificates of deposit (CD’s) or putting your money in a savings account.
2. Investing in the stock market helps you stay above the inflation rate. Between 1999 and 2001, the Nigerian stock market grew by an average of 33% while the inflation rate was at an average of 12% within the same period.
3. You can invest in the stock market with very little money. Many stockbrokers will open a stock broking account for N3, 000 or less. You can buy into a high quality mutual fund for as low as N10, 000.
4. When you own actively traded shares, you can easily sell them and get your money back in a short time.
5. When you buy shares in the stock market, you get to become a shareholder or part owner of a public company with all the privileges entitled to shareholders.
6. You do not need to be an expert in shares or even bother yourself about which shares to buy. Investment bodies called unit-trusts or mutual funds can manage your investment for you for a small commission. We will talk more on this in chapter 4.
7. Investing in the stock market is fun. If you choose to manage your stock portfolio yourself (i.e. you decide which shares to buy and hold and which to sell) you will realize that you can make money from the stock market and have fun doing it.