Every investor that is presently known to make good returns on investments was once a novice. Being a novice in a particular field is not in any way bad. Not making any effort to move beyond this level however is what stagnates us no matter what field we find ourselves. Many people out there have questions on their minds with only a few getting the needed answers. Every intending investor has some questions as regards the stock market and how to invest. Below are answers to the Top 10 questions asked by the beginner investor.

* What is the stock market? The stock market is trading platform where shares of different companies are bought and sold on a daily basis (usually Mon-Fri). The transactions on this platform are handled by stockbrokers- certified individuals licensed to buy and sell shares on behalf of clients.

* What are shares? Shares are units representing the monetary value of a company. Shares are sold or issued by a company in exchange for cash. The cash generated from the sale of shares are used by companies to fund expansion projects in most cases. An individual is said to be a joint owner of a company whenever he purchases the shares of the company in question.

* When can I buy shares? The best time to buy shares is right now. The investor is free to buy as long as the money is available and he is sure that he has the right information and advice to buy the shares of a particular company. The stock market is active throughout the year except on weekends and public holidays.

* Where can I buy shares? Shares can either be bought from the primary market of the secondary market. The primary market is where shares are sold to the general public by companies intending to raise fresh money for specific purposes. The secondary market is where shares that have been bought in the primary market are traded daily between those that want to sell off and those that want to buy. People say, the secondary market is where that activity actually takes place.

* How do I buy shares? If you want to buy from the primary market which is also known as buying a public offer, all you need do is pick up the offer form from selected points, fill it and return to the point of collection. If you want to buy from the secondary market, you would need to engage the services of a stock broker. They are the individuals licensed to transact on the platform of the secondary market. In exchange for their services, you would be charged a fee, while you can actually buy from the primary market without the direct input of a third party.

* How do I make money from shares? Money/gains can be made from investing in shares through the following means-dividends, bonus issues or/and capital appreciation. Dividends are cash payment made to shareholders based on the number of units possessed per time. Bonus shares are additional shares given to shareholders based on the number of shares possessed per time. Capital appreciation on the other hand is when the cash value of the shares increase due to an increase in price relative to the price at which the shares were bought. You can only cash in on capital appreciation when you sell your shares at a higher price compared to the cost price.

* How long do I have to leave my money in the stock market? You can leave your investments for as long as you want to depending on you financial commitments. However, experts have stated that true gains from investment come in the medium to long term.

* Do I need the services of others? Eventually, every investor would need the services of a stock broker to execute some stock transactions. Since this is the case, it is advisable to open an account with them once you make up you mind to start investing. The primary responsibility of stock brokers is to buy and sell shares on behalf of clients.

* Can I have more than one stock broker? Yes you can. An investor can have a many brokers as desired. You can also decide to change brokers depending on various factors ranging from integrity, quality service etc.

* How do I get my money after i sell? Whenever you register with a stock broker, you would be mandated to give your account details. In most cases, a current( checking) account would be required due to the fact that a cheque would be issued for the amount of money to be paid to you. Stock brokers do not pay cash. Therefore, if you do not have a current account, visit your bank and open one today.

This entry was posted on Thursday, February 26th, 2009 at 3:21 pm and is filed under StockMarketNigeria. You can follow any responses to this entry through the RSS 2.0 feed. Tags: ApprovedO
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