There is a lot of money to be made from Nigeria's stock market just by knowing when to buy and when to sell.
Although Nigeria had probably already experienced it's own time of boom
and shock, there are still market opportunities to be taken advantage
of just by trading shares.
In every year, stock prices always
experience a period of upswings and down swings. Most stocks in active
sectors tend to always rise and fall at different times owing to a lot
of factors and that's where stock investors tend to make money.
One good thing I've noticed about buying and selling shares in Nigeria
is that you don't have to pay any tax for capital appreciation. Capital
appreciation is the profit you get when you sell a stock at a price
higher than what you bought it. The only fees or taxes you might pay are
some small fees like NSE fees, Stockbroker's commission all of which
amount to about 4% of your transaction. You get to keep most of the
profit you make from selling your shares.
Some people buy and
sell shares once a year, some sell once in three months and some sell
every month while some never sell their shares.
No matter what
kind of investor you are, you can make some good money from Nigeria'
stock market by taking opportunities such as selling, buying and even
just holding your stocks.
Let's take a look at Access bank for
instance. As at December 2012, the stock price was at N9.00 according to
a historic stock price tool I got from Cashcraft But as at today in February, the stock has appreciated to N12.00.
Chances are that it would keep appreciating till around April and may
even reach N15.
If I had bought 100,000 units of Access bank with
a N900,000 capital, by now, my money would be worth N1.2m and probably
N1.5m by April. So that gives me a capital appreciation of about
N300,000 just for about 2 months investment.
Another good
investment would have been Sterling bank which is now currently priced
at N2.93. However as at October 2012 when I first watched the stock, the
price was at around N1.6 showing a price appreciation of about N1.3.
This means that if I had invested about N1.6m by October 2012, by
February 2013, I would hve had a net investment of N2.93m showing a
total profit of about N1.3m in just 4 months of holding the stock.
So you see, stock trading is a good business but you just need to know
when to put your money in and when to take it out. Stock trading is
different from stock investing for the long term. Most people who trade
stocks tend to hold it for the short term and not necessarily looking
for dividends and other small benefits.
You can make good money
trading stocks but the idea is to buy low and sell at the peak and sell
at the peak to buy into newer opportunities. You can trade bank stocks,
insurance stocks, food and health stocks and so on.
If you intend
being a short term stock investor, you should keep a tab on news
reports and financial record of the company as well as their historical
prices. When investing in a country like Nigeria, a growing nation, it
is really hard to lose in the long term since the economy would always
be growing for now.
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