Good Stock Investment: Facts you need to know about Stock Marketing

Investment is a sure way to greatness but not when it is done in the wrong place. Money they say grows on the tree of patience! But what if you didn’t get it right? What if you are not better enlightened on how to invest. What if your investment does not bear good fruit? Wealth they say is when small efforts produce big results and poverty is when big efforts produce small results.

Have you ever seen your shares in such dilemma! There is no doubt if you say yes after all, that may be why you have decided to read this article.



Your Knowledge about the Stock Market.



It may be possible that you are among those who have a great knowledge about the stock market. You have a knowledge of the stock market and the company law, you read company annual report and accounts from cover to cover; you can even recite most sections of CAMA by heart, and attend almost all the companies’ annual and extra-ordinary general meetings.






At such meetings you make your presence felt by making meaningful contributions and asking intelligent questions sometimes to the amazement and embarrassment of directors and management.



Shareholders that can’t afford Substantial Investment

There is nothing wrong with that, but on the long run you are among the shareholders that can’t afford substantial investment. You resort to buying new issue stocks with minimum subscription of say 120 shares costing $1.00 per unit.



These small units of shares are held in as many company quoted on the exchange. You tend to range equal to substantial shareholders when there is voting by show of hands, but when important decision are at stake you are usually edged out by poll voting at general meetings.



The dividends money you receive as a shareholder is so small that the warrants cannot cover transport fare. Most of such dividends at least end up being classified by registrars as unclaimed.

Are you for Political or Financial Satisfaction?

At this point, it seems that the benefits you derives from buying shares is not financial but political; ego satisfaction and recognition.



In Stock Marketing Quality not Quantity that Matters

It is better to reduce the numbers of companies in which shares are held to the barest minimum for control purposes. In stock marketing, it is not quantity that really matters, it is quality. The quantity of shares you have with companies is not really the matter but the quality of the share you have with them!



For example 200 shares at N70 each are better off than 20,000 shares at 70k (even though they are of the same value). This is because of the acceptability, rating and ability to sell, when the need arises.

Categories of your Shares.

If you take your share to a bank for loan, they may be categorized or rated into the following:
  • Class A
  • Class B
  • Class C or Reject



The shares that sell for 70k each would at best be rated Class C if not rejected! The rating determines the acceptable value; while Class A shares may be accepted for 80% of the current value, B may be considered for only 60%, C for 45% and others Zeros.



If you want to sell only one of such stocks, it may not be attractive to brokers because the commission may not cover transportation fare to registrars for verification or cost of stationery. Why not invest as a Class A stock broker for easier acceptability when you want to sell it!



Caution (Beware of fraud)

Making a necessary investigation about a firm or company before investing with them will be wise, don’t get to those that will swallow your money.



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Comments

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