2 June 2017

Stocks Investments: 10 Things You Must Consider Before You Invest in Any Stock


Stocks are equity investments that represents part ownership in a corporation and entitles you to part of that company's earnings and assets. There are two main types: common and preferred. Common stock entitles you to shareholder voting rights but no guarantee of dividend payments. Preferred stocks provide no voting rights but usually guarantees a dividend payment.

Common stock would ensure the owner to vote at shareholders' meetings and to receive dividends, but this dividend is not guaranteed. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.

Stockbroking, which is the buying and selling of stocks through a stock exchange, can be a profitable investment avenue largely misunderstood by many. With the digital age and ease of online investing, questions abound about how it works, who should invest in stocks, what kind of stocks to buy, when to sell and whether it should be considered for short or long term investing.

You must consider these before stock investments

To answer some of these questions and shed more light on the science of trading in stocks, let us consider nine points everyone should note before investing in the Stock Market.
  1. You are buying more than just shares, you are buying into a company
  2. Buying a stock makes you a shareholder which means as the company profits, you profit as well. If the company does not profit, you also do not profit.
  3. A stock’s price is determined by the company based on their industry, economic environment, customer base and political climate.
  4. Before investing, it is wise to research into the organisation you are interested in as well as other stock market updates within your reach.
  5. Your gut feeling or perception is important in stock broking. Never rely on it alone, always get expert investment advice as well.
  6. Have an investment plan that will guide your investment choices. Ascertain whether or not you want to invest long or short term.
  7. Never invest all you have at once. Always have some money reserved for opportunities that come up.
  8. Shares should not constitute all your assets, diversify your investments.
  9. Monitor your stocks, even if it is a long term investment. The stock market is dynamic and ensuing developments might affect you in the long run.
  10. Always go through the right channel when investing in stocks. Speed of execution, availability of advice, update speed and information supply are some of the things to consider when selecting a stock broker.
With all the above checked and confirmed, you are ready for a rewarding stock trading experience. If you can, you can invest on your own after you must have pondered on the points raised above. You can invest from the comfort of your home, via any internet enabled handheld device. However, if you cannot, then go through the help and services of seasoned expert stockbrokers.

It is worthwhile to register with tested stockbrokers. There are many but one example would be ARM Stocktrade. With established stockbrokers, you are assigned an online account, and you can still enjoy the ease of investing from the comfort of your home, via any internet enabled handheld device. With real time updates and access to research reports, you have everything you need to make favourable stock trading investments.

Also read: More articles on income opportunities

About the company:
ARM Stocktrade is owned and operated by ARM Securities. The company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities is a product of an alliance between Hamilton Hammer & Co. Limited (“HH”) and Asset & Resource Management Holding Company (ARM) Limited.

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