• Investing can be as easy as ABC, especially when it is done right. If you are new to investing or just looking for a refresher course, this article will guide you into making the right calls like the best investors out there.

 1. Create a Watchlist: a watchlist is like a vision board. It helps you identify all the potential stocks that you are or may be interested in.

How to create a watchlist?

· Make a list of companies that you hear frequently on the news that are listed on the Nigerian Exchange.

· Make a list of companies that you like that are listed on the Nigerian Exchange

 2. Learn the Essentials by Searching for information: there are a few things you need to know such as:

· What does the company do?

· What is their major income source?

· Who are their competitors?

· How has the stock price performed?

· What are analysts and market players saying about the stock?

 3. After step 1 and 2 have been properly executed you can now proceed to opening a stockbroking account on I-invest and clicking on the buy button.

Some advice  

· Buy only companies that you have sufficient information about.

· Have a plan and time frame before buying. Example: I expect to make 18% return in the next 3 months.  

· Have a stop loss. Example: If the value of the stock declines by 8%, I will cut my losses and buy another stock.

· Monitor the performance of the stock daily

4. Keep up with the news and research publications about the stock market. You can also sign up for the daily newsletters and periodic publications: this will give you all the necessary information to make the best decisions.

Now that you’re ready to start investing in stocks, let’s get into it.

Step #1: Start Investing as Early as Possible

Investing when you’re young is one of the best ways to see solid returns on your money. Thanks to compound earnings, which means the returns on your investment start earning their own return. Compounding allows your account balance to snowball over time.

Here’s how it works, in practice: Let’s say you invest ₦20,000 every month for 10 years and earn a 6% average annual return. At the end of the 10-year period, you’ll have ₦3,330,000. Out of that amount, ₦2,420,000 is money you’ve contributed (₦20,000 monthly contributions) and $910,000 is the interest you’ve earned on your investment. Now imagine accruing this over a longer period. That is the power of compounding!

 STEP #2: Understand How the Market Works

A lot of investing mistakes stem from people not having proper knowledge of what they are putting their money into. If you want to make money in stocks, or any other investment, you must do your research first. Gather all the basic knowledge you can find about the market. Read online resources, watch educational videos, subscribe to newsletters, etc.   

 STEP #3: Decide How Much You Want to Invest

Before you start investing, you need to consider your income, expenses, and goals. Then, determine how much you can conveniently invest monthly and be disciplined about it. This, for most people, might mean cutting down expenses or generally changing their lifestyle to accommodate investing.

 STEP #4 Select an Online Stockbroker

Using an online stockbroker is the most convenient way to purchase stocks. You can buy shares and stocks online through a Securities and Exchange Commission (SEC) licensed app. One of the most trusted online platforms to buy Nigerian shares is i-invest. You can download this app from your app store, create an online account like that of opening a bank account, and begin to invest. Another option is to use a full-service broker like Parthian Securities or to purchase shares directly from the exchange.

 STEP #5: Select the Stocks You Want to Buy

After you’ve established and funded an account, you’re ready to start picking stocks. When conducting your research, don’t let the flood of information and live market fluctuations overwhelm you. Make your objective clear. The goal is to find businesses you know and use their product or services, in which you would like to have a stake. I remember Uncle Jimmy had always insisted that we buy stocks of companies that we believe will be there for the long haul. So, when I started off, I picked Nestle, Airtel, and Guinness as my first set of stocks.

 STEP #6: Decide How Many Shares You Want to Buy

You should not feel compelled to purchase a specific number of shares at once. Begin by purchasing one stock to gain experience and to see if you are prepared to weather difficult times with minimal sleep loss. This can help you test your risk tolerance level. When you’ve mastered the art, you can increase your stake.

 STEP 7: Don’t Stop Learning

Taking the time to look over the financial history of the companies you are thinking of investing in, will give you a better sense of the future. While no one can say with certainty that a stock will go up in value, taking the time to evaluate the past few years of the company’s growth can give some insight into the possibility and help you stay ahead when opportunities arise.