Securities dealing houses urge investors on risk management

The term “stock market” often refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares take place. Simply put, the stock market, also known as the equities market, is a place where shares of publicly owned companies can be bought and sold i.e.  the stock market enables buyers and sellers to make a trade of shares of publicly-listed companies.

Getting into the stock market for the first time can be intimidating for beginners, especially if you don’t know how the stock market works. Before you start your investing journey, you also need to know where to buy stocks. While today it is possible to purchase almost everything online, there is usually a designated market for every commodity. Such dedicated markets serve as a platform where numerous buyers meet, interact, and transact. For instance, when you need groceries, you go to the supermarket. When you’re looking for stocks to buy today, you go to the stock market.

Individual and institutional investors come together on stock exchanges to buy and sell shares in a public venue. Share prices are set by supply and demand as buyers and sellers place orders. Order flow and bid-ask spreads are often maintained by specialists or market makers to ensure an orderly and fair market.

It is also worth mentioning that the stock market isn’t exactly like a grocery store. To buy and sell stocks, you need to go through an intermediary known as a licensed stock brokerage firm. That’s because the stock market is a secured and regulated environment where market participants can trade shares with low, if not zero operational risk. 

The stock market also acts as primary markets and secondary markets. Now, what do I mean by that? For starters, the primary market is where shares are issued and sold to investors for the first time through the process of an initial public offering (IPO).

Following the IPO process, the stock exchange serves as a trading platform that facilitates regular buying and selling of the listed stocks. This constitutes the SECONDARY MARKET. The stock exchange market earns a fee for every transaction that occurs on its platform during the secondary market activity. When buying stocks in the primary market, investors are purchasing stocks directly from the issuer, while the secondary market transaction is where existing stocks are traded between investors or traders.

A stockbroker is a regulated representative of the financial market who enables the buying and selling of securities on behalf of financial institutions, investing clients, and firms. A stockbroker is also called a registered representative or a broker. The trading or purchase or sale of stocks on the stock exchanges are usually executed through a stockbroker.

In Nigeria, at the minimum, a Stockbroker should pass the prescribed Examinations of Chartered Institute of Stockbrokers (CIS) and undergo Automated Training System (ATS) of NGX. Most stockbrokers work for a brokerage firm and handle transactions for a number of individual and institutional customers.

Actually, trading without a stockbroker is not possible. The stockbroker act as an intermediary between an investor and the securities exchange, because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members who are stockbrokers.

Absolutely, an investor can have more than one stockbroking account with two or more different stockbrokerage firm. These different accounts can also be linked, by using the same Clearing House number (CHN) to open the accounts with the different firms at the point of filling the KYC (know your customer) form. However, investors are discouraged from using multiple accounts in the same firm

When you are now ready to put your money into the best wealth generator: the stock market. The question should be how to invest in the stock market for beginners? How to invest money in the stock market for beginners can be confusing at best. Investing requires you to set aside money while you are busy with life and have that money work for you so you can reap the rewards of your labor in the future. 

Let’s assume you have set aside $10,000, and you’re ready to enter the investment world. So, what happens next? The decision to hire a financial advisor or to simply do the research on your own to pick the best stocks to buy is entirely up to your own free will. Investing in the stock market might be easier than many would’ve thought as all you need is an online brokerage account to get started. There are, however, a set of questions you need to ask yourself before embarking on the investing journey.

You need to consult a stockbroker to process E-DIVIDEND mandate for you to receive all your outstanding and subsequent dividend in your designated bank account.

Your Stockbroker will assist you to do a global search through the Central Securities Clearing System (CSCS) at a fee, and subsequently all outstanding shares will be reconciled into your preferred CSCS account with your brokerage firm.

The first modern stock trading was created in Amsterdam when the Dutch East India Company was the first publicly traded company. To raise capital, the company decided to sell stock and pay dividends of the shares to investors. Then in 1611, the Amsterdam stock exchange was created.

During the 1920s, the U.S. stock market underwent rapid expansion, reaching its peak in August 1929 after a period of wild speculation during the roaring twenties. It was called the “Roaring Twenties” as it was a period of economic prosperity with a distinctive cultural edge in the U.S. and Europe.

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