Buying stocks in Nigeria – Step By Step Guide For Beginners

If you’re going to invest in the stock market, it’s important that you educate yourself on basic investing techniques, know when to buy and when to sell, and avoid common mistakes. One of the biggest mistakes that new investors make is to invest too much of their portfolio at once. With the help of some savvy stock market gurus and their tips, you can easily start buying stocks in Nigeria without breaking the bank.

A lot of people wonder about the best way to invest in stocks. After all, how much can you lose? And how much can you actually earn? The truth is that you can easily lose a huge amount of money by following the wrong advice. If you’re interested in learning more about investing, then you’re in the right place. In this article, we’re going to go through how to buy shares, where to get investment advice, and how to make money from your investments. We’ll also teach everything you need to know about investing in stocks, including how to build your first portfolio.

Minimum amount to buy stocks in Nigeria

There are several factors to consider when figuring out the minimum amount to buy shares of your company. First, you need to figure out if you want to be a passive investor or a hands-on investor. Then, you need to decide whether you want to be in it for the long haul or have a short-term gain in mind. Lastly, you’ll have to figure out how much risk you’re comfortable with.

That being said, according to the Central Bank of Nigeria (CBN), “the amount of securities being applied for must have a minimum value of N10,000 and in multiples of N1,000 thereafter. Interested investors should obtain and complete application forms through authorized dealers (Banks and Discount Houses and Stockbrokers). Interested Authorized dealers may submit tender on their own account or on behalf of their customers. Therefore, subscription is open to banks, discount houses, corporate bodies, institutions, and individuals”.

Best time to buy stocks in Nigeria

While many people assume that the best time to buy stocks is during the trading hours on the exchange, the best time to buy stocks in Nigeria is when there is heavy selling pressure. During such times, stocks sell at lower prices, and hence, there is a better chance of making money. The stock market is driven by supply and demand forces. During periods of high supply, the demand side, or the buying power of investors, usually falls. Thus, it is in the best interest of investors to buy stocks when there is a high demand for stocks. This is because the cost of buying stocks is higher. Hence, if there is more demand than supply, then the prices should go down. 

Most people believe that the best time to buy stocks in Nigeria is when there is an active trading session on the exchange. However, they are wrong. The best time to buy stocks in Nigeria is when there is heavy selling pressure. If stocks have been sold off, there is no point in waiting for the next trading session. You will miss out on the profits. Buying when there is heavy selling pressure means you get to buy at lower prices, which is a great way to make a profit.

How to buy shares in Nigeria  for beginners

Buying shares in Nigeria can be done online through stockbrokers. These online brokers charge commissions for selling and trading shares. Here are steps to purchasing stocks in Nigeria.

1. Open an account with a broker

The first step in purchasing shares in Nigeria is to register an account with a financial brokerage firm, which will serve as your connection to the Nigerian stock market.

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2. Make a deposit and acquire ID

Deposit funds into the account and then get your trade number, which will serve as your identification on the Nigerian stock exchange.

3. Analyse the Nigerian stock market

Observe the stocks you want to purchase prior to buying shares in Nigeria so that you can make the best decision. You must first grasp accurate knowledge of the stock market.

We recommend beginning with a little sum and not purchasing a huge number of stocks in order to gain experience. Using a demo account, you may also sell and buy shares in Nigeria without incurring any risk.

4. Select the kind of request

You must choose the kind of demand when buying shares in Nigeria since you will see the asking price and the bid price at the moment of purchase.

The asking price is the price at which sellers are willing to sell their shares of stock. The bid price is the price at which prospective purchasers are willing to buy a share. This disparity is referred to as the “spread.”

5. Start buying

After completing the preceding processes, you may begin buying shares in Nigeria via the Nigerian stock exchange or your brokerage firm, and you can even contact your financial adviser on the stock exchange.

6. Regularly enhance your stock portfolio

In order to prevent losing money on shares that are no longer fit for your objectives, it is not enough to just buy shares in Nigeria; you must also examine if the shares in your portfolio are still appropriate for you.

Before buying stocks in Nigeria

Before beginning any investing endeavor, you must assess your financial resources, define your investment objectives, and be completely prepared to assume responsibilities.

You must recognize that the Nigerian stock market swings frequently owing to supply and demand, company performance, and global events, and bear responsibility accordingly.

You must have well-defined investing objectives. Is the objective amusement or profit and investment? You must also be eager to build a strategy for the progression of your investing process, including when to purchase and sell and when to maintain the status quo.

Bottom line

In conclusion, you must remember that investing requires patience and commitment. It’s not something you can jump into right away and expect to make millions overnight. It takes time, effort, and knowledge to build a portfolio that can provide you with a steady stream of passive income. 

A good strategy while buying stocks in Nigeria is to start small, put aside money regularly, and learn as much as you can about the markets. As you gain knowledge and experience, you’ll start to see patterns, trends, and the potential to make money from your investments. The more you learn, the more opportunities you’ll see. You’ll be able to see the bigger picture and make better decisions that will help you to achieve the success you desire. Want to learn how to make money with crypto? Download the Bitmama app to get started