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Why Do You Buy Stocks? - Business - Nairaland

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Why Do You Buy Stocks? by soul2jah: 1:44am On Jan 04, 2008
What Is Your Motive For Buying Stocks?

Hello,

It is well noted that most Nigerians buy stocks and keep the certificates under lock and key, this is either because they do not know that they could trade or like some buy because every body is buying, i mean it is SHARES!. Some have stock brokers and they can`t remember when last they called them for transactions. They believe their future will be secured by that.

[ What about you? What is your reason? ] <<heavily modified>>
Re: Why Do You Buy Stocks? by tome1: 8:55am On Jan 04, 2008
a lot of people dont have good education about stock trading and dat explains why we keep our share certificate under lock and key wink
Re: Why Do You Buy Stocks? by graceade(f): 9:32am On Jan 04, 2008
YES I THINK MOST PPLE DO NOT KNOW HW D STOCK MARKET WORK DAT WHY DEY BUY AND KIP THEIR CERTFICATE UNDER LOCK. I THINK D MAIN PURPOSE OF INVESTING IS FOR (1)THE RAINY DAY, WEN D SHARE PRICE OF YUR STOCK HAS APPRECIATED TO A LEVEL U CAN DEN SELL AND PPLE SHOULD ALWAYS TAKE ADVANTAGE OF THE MARKET TO SELL THEIR SHARES WEN D PRICE IS APPRECIATING VERY WELL. SELL AND INVEST BACK YUR CAPITAL AND U CAN ALSO BUY OTHER STOCKS TOO FOR D PROFIT U MAKE TAKE FOR INSTANCE INTERCONT. BANK SHARES D PUBLIC WAS 13.50K THOSE WHO BOUGHT D OFFER CAN TAKE ADVANTAGE OF THE MARKET NOW SELL AND BUY MORE OTHER STOCKS E.G PENNY STOCKS
Re: Why Do You Buy Stocks? by moraachi: 9:42am On Jan 04, 2008
many 9ja ppl are not well educated on stuffs like that
Re: Why Do You Buy Stocks? by kayman2u(m): 11:42am On Jan 04, 2008
Education is the main thing about dealing with stocks. All we see on daily basis are companies esp Banks coming to the market to solicit for funds witout taking time to educate the investing public thru forums on what or what not not to do with thier stocks in the nearest future.
Let me make a quick distinction between two major classes of investors viz Institutional investors and speculative ones. An Institutional investor, say a company buys these stocks en bloc hoping to get capital appreciation and dividends on the their investments but more emphasis is placed on the dividend aspect cos it constitutes a large part of their investment income in their books and these amounts are usually large.
For the average investor like you and me who mostly subcribe for minimal holdings, the amount we get as dividend is mostly always insignificant and what should matter to us most should be the capital appreciation on these shares . Speculative trade should be the main aim for those of us that fall under this category as against just keeping the certificates and boasting about the little appreciation every now and then. It should be noted that stocks are not meant to be held indefinately as is the practice here in 9ja , instead it should always xchange hands as frequently as possible . The market value of your share does not have to drop before you trade in it , you can always get a better stock if u are willing to speculate and trying to get the stock with the best growth potential.
Our stock market is devoid of life mostly because of the ''sit tight investors '' we have around and we need to make it more volatile in order to attract more foreign interest into the system.
The keyword should be '' DONT HOLD ON TO YOUR SHARES WHEN YOU HAVE NO GOOD REASON TO DO SO '' . Some bumper opportunity may just be passing you buy.
Further enligtenment is required,
Re: Why Do You Buy Stocks? by sphinxx(m): 12:30pm On Jan 04, 2008
kayman2u:

Education is the main thing about dealing with stocks. All we see on daily basis are companies esp Banks coming to the market to solicit for funds witout taking time to educate the investing public through forums on what or what not not to do with their stocks in the nearest future.
Let me make a quick distinction between two major classes of investors viz Institutional investors and speculative ones. An Institutional investor, say a company buys these stocks en bloc hoping to get capital appreciation and dividends on the their investments but more emphasis is placed on the dividend aspect because it constitutes a large part of their investment income in their books and these amounts are usually large.
For the average investor like you and me who mostly subcribe for minimal holdings, the amount we get as dividend is mostly always insignificant and what should matter to us most should be the capital appreciation on these shares . Speculative trade should be the main aim for those of us that fall under this category as against just keeping the certificates and boasting about the little appreciation every now and then. It should be noted that stocks are not meant to be held indefinately as is the practice here in Nigeria , instead it should always xchange hands as frequently as possible . The market value of your share does not have to drop before you trade in it , you can always get a better stock if u are willing to speculate and trying to get the stock with the best growth potential.
Our stock market is devoid of life mostly because of the ''sit tight investors '' we have around and we need to make it more volatile in order to attract more foreign interest into the system.
The keyword should be '' DONT HOLD ON TO YOUR SHARES WHEN YOU HAVE NO GOOD REASON TO DO SO '' . Some bumper opportunity may just be passing you buy.
Further enligtenment is required,
Re: Why Do You Buy Stocks? by sphinxx(m): 12:50pm On Jan 04, 2008
Hi members,

I quite agree with Kayman. I believe that the stock market is quite similar to the forex and commodities market. It is open to speculative activities on different companies' stocks. The rule for me is simple: buy low, sell high.
However, the stock market also involves another vital element not present in the others: Capital Appreciation. on some kinds of stocks, it's also good to allow for the stock to grow to a certain extent, not just in value but also in volumes. This is the quality of a real Long Term Investor.
Anyway, whatever the case, keep your eyes open and ears to the ground and get advice regularly from the pros.
Happy Investing.
Re: Why Do You Buy Stocks? by invisible2(m): 2:10pm On Jan 04, 2008
Long term investing beats the poo out of speculative trading anyday, ask the worlds richest investor and he will tell you he has some companies he bought their shares 65 years ago!

Trading fritter away your money on brokers commission and other charges, plus the countless hours you waste sitting in front of computer screens doing technical analysis?
Re: Why Do You Buy Stocks? by BabsO2(m): 7:09pm On Jan 04, 2008
invisible!:

Long term investing beats the poo out of speculative trading anyday, ask the worlds richest investor and he will tell you he has some companies he bought their shares 65 years ago!

Trading fritter away your money on brokers commission and other charges, plus the countless hours you waste sitting in front of computer screens doing technical analysis?

@ Invisible I see you here.

Also I will list 3 reasons for investing in stocks are

1. Growing the GDP by creating wealth through companies that provide goods and or services.
The standard of living of any society is based on the goods and services available to society. A simple example of how stocks work is I open a food joint with N 1,000,000 as fixed assets. At the end of the year after deducting all expenses and further investments in the business. I make a profit of N 500,000. (P.E. of 2 !!!) and had new asset valuation of N 1,250,000 as I bought new equipment (i.e. the further investment in the year). [Price to book of 0.8] , can go on but will stop here. AT THE END OF THE DAY IT ADDS TO INCREASED SOCIETAL WEALTH (i.e. higher GDP)
2. Trading
I buy low and sell high within a short or medium or long term. (Just like forex trading)
3. Follow, Follow.
This is the quick way to make money now. May even forget where the certificate is or the quantity bought or what his or stockbroking statement looks like. May not even know if dividend was paid or not.
Re: Why Do You Buy Stocks? by topkin(m): 8:56pm On Jan 04, 2008
I do it for future purposes. Not really for the short-run, but for the long-run. Count is as a way of securing my future grin
Re: Why Do You Buy Stocks? by GMG(m): 10:37pm On Jan 04, 2008
does any have a better suggestion on what to do if a relative bought the shares on your behalf ( Currently living outside the country). I have no clue as to what to do with the shares I have.

Please a valuable advice will be appreciated
Re: Why Do You Buy Stocks? by Obalende: 10:40pm On Jan 04, 2008
I do it for future but also open to short term opportunistic situations.
Re: Why Do You Buy Stocks? by oore(m): 11:17am On Jan 05, 2008
GMG:

does any have a better suggestion on what to do if a relative bought the shares on your behalf ( Currently living outside the country). I have no clue as to what to do with the shares I have.

Please a valuable advice will be appreciated

@GMG,
If you have a cscs account already, when your certificate is delivered, you can ask your relative to deposit it in CSCS through your broker - Signature verification is just what is needed (presuming that the shares are bought in your name).
if no CSCS account, you can open one through a stockbroker, you can do this by consulting (phone,e-mail, fax) with most of the stockbroking firms. This require varying amounts or combination of shares+money. you can search for the thread on Stockbroker for Nigerians in Diaspora to help you here. Then follow the first case.

The most important thing for you to do is to ensure that your certificates are lodged into CSCS and you can monitor them, trade your shares if and when you want through your stockbroker.
Re: Why Do You Buy Stocks? by oore(m): 11:29am On Jan 05, 2008
@ topic,

My first impression of buying stocks some years ago was basically as an investment for the future - especially for retirement purpose. This seems to be what is on many peoples mind whenever they are buying public offers and as such they are never worried about lodging their certificates into the CSCS for trading/safe keeping. They just believe that when the time comes they can sell the certificate for money or just collecting the dividend.
Recently, i have another school of thought. The need to be financially independent even at retirement, makes me to get more involved on happenings on NSE.

I have concluded that the first school of thought is half complete. It is better to invest for the future (long term) while watching over your investments to maximise the returns that comes out of it. Let your money work for you and the returns obtained from it also yielding more money - Get involved.
Re: Why Do You Buy Stocks? by duma: 6:09pm On Jan 05, 2008
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Re: Why Do You Buy Stocks? by gbeborun(m): 6:52pm On Jan 05, 2008
@ Babs_O
Just a quick one, how did you arrive at a P.E of 2? Using your example, you simply divided your net assets by profit (Please correct me if i'm wrong). I thot P.E (Price Earning ratio) was Market Price per Share/Earnings (PAT). Even at that, your hypothetical company is not a listed one, so your theory of PE is not applicable.
In a forum like this, i think people shld get their facts right before posting so as not to mislead readers/users of such information.
Re: Why Do You Buy Stocks? by rufaai(m): 8:02pm On Jan 05, 2008

Ooh, I buy stocks for longterm, He he he,

I only buy stocks of companies I appreciate their product and believe they have a greate future to come, I also consider the offering. I mean I buy from young and starting companies that will last in the market.

On the Other hand I buy stocks because I believe its a very good security to buy that could inturn become an asset on the long run! - I one day want to sell the tickets in future not just keep buying and buying,

I dont go with the crawed. So, I have plans, After SCHOOL!!!
Re: Why Do You Buy Stocks? by niceuzor: 9:20pm On Jan 05, 2008
I don't buy Stock because i don't seem to understand Stock thing! embarassed
Re: Why Do You Buy Stocks? by Panache(m): 2:09am On Jan 06, 2008
In the past, like many other Nigerians I bought stock to secure the future. Lately, I have found out that it you can make a lot from buying when it is low and selling when high.
Re: Why Do You Buy Stocks? by jidody(m): 5:38am On Jan 06, 2008
A good number of stockbrokers are slow.
Re: Why Do You Buy Stocks? by alineh(f): 7:35pm On Jan 06, 2008
i think and know that d question posted is personalised,that is,why 'YOU' as an individual buys stock,and not whether others understand or not,as most nairalanders have replied.Nonetheless,it's investment,planting your money where u will not have to take back the exact amount planted,but a multiplied harvest.
Re: Why Do You Buy Stocks? by Jimi90: 1:22pm On Jan 07, 2008
Dear Friends
Nice topic!
I am interested in stock market and I want to buy shares in reputable company or bank.
Please advise me.
Thank you,

Jimi90
[/color][color=#990000]
Re: Why Do You Buy Stocks? by mekoyo(m): 1:33pm On Jan 07, 2008
Stock trading is like education. You by stocks to prepare you for the future, its an important thing to do, it helps in so many ways, to meet various needs and also can be sorce of great financial help.
Re: Why Do You Buy Stocks? by anukulapo: 4:04pm On Jan 07, 2008
me sef na one of the "JU" oooo.I beg i need orientation,
i know from the name FIANACIAL MARKET, it's a good place to make money
if u know bout it,

I beg,i need tutorial, make me sef dey confident about stocks,
so i can know how to monitor my transactions, whaen to sell and how
when to buy and how to trade,

that if i handle a news paper,so i can know what i read in the stock page

Can some one pls tutorial me?

Abeg
Re: Why Do You Buy Stocks? by kingkams(m): 5:27pm On Jan 07, 2008
So it will appreciate in value at a later time.
Re: Why Do You Buy Stocks? by beejee: 7:50pm On Jan 07, 2008
Hello my dear investors, i just got a Form from my Stockbroker ifo the above mentioned compay i.e Acorn Petroleum Ltd, They are doing a Private Placement(=N=2.80,Min of 100,000 Units).Pls does any one has Idea abt the Coy AND HOW VIABLE.Respnse urgently required!!!!
Re: Why Do You Buy Stocks? by Oyelad(m): 11:46am On Jan 08, 2008
Well before investing, in shares, you have to define what your motives are, i.e precautionary or speculative.
Hence, if you are investing base on precautionary motive, then you have to look for stocks, with good dividend pay out,and script bonus issues history, while if you are the speculative investor, you should always invest in stocks with good fundamentals, and make sure you balance your portfolio with growth and value stocks. Will be back, takia everyone.
Re: Why Do You Buy Stocks? by Tawak(f): 6:07pm On Jan 08, 2008
INVESTMENT
Re: Why Do You Buy Stocks? by GMG(m): 10:36pm On Jan 08, 2008
@oore

Thanks for the advice. Please what does cscs account me? Please pardon my ignorance on the subject. Another question is, if I have shares with more than one stockbrokers, do I need to have two cscs account and finally, how long does it take to convert certificate into electronic one.

Thanks in advance for the reply
Re: Why Do You Buy Stocks? by yimiton(f): 2:18pm On Jan 09, 2008
I buy them because every other person buys them!
Just as you said, I lock up the certificates and those that are not delivered, i don't care about.
I hope I'll wake up to them some day though.
Re: Why Do You Buy Stocks? by chumuo(m): 3:18pm On Jan 09, 2008
Then brief more on motives of buying stocks so we can learn
Re: Why Do You Buy Stocks? by BTT(m): 5:55pm On Jan 09, 2008
Sellin shares is like a man who has a business and needs more money to xpand his business and thus calls on all and sundry to put some money into his buzness so that they can share the profit together as at when due. The profit is what is called 'dividends'.  By bein a shareholder therefore, it implies that you are part of the owners of the company. When you choose to relinquish your ownership (selling your share)  is your business (or properly put, your stockbrocker's, that's what they are meant 4 anyway).  If u have enquiries, please call me on 08060641635

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