Are you curious about the Nigerian Stock Exchange (NGX)? This feature breaks down the basics of stock trading, explores affordable options for new investors, and highlights the importance of seeking professional advice.
The Beauty of Highs and Lows
Stockbrokers emphasize that buying low and selling high is the essence of stock trading. Price movements indicate entry and exit points, with some investors cashing out while others wait to buy in.
Embrace Calculated Risk
Investing involves risk, but so does life itself. Successful investors are often those who embrace calculated risks. If you’re not actively trading on the NGX, you might be missing out on potential opportunities, especially in the current market.
Start small and gain experience.
For beginners, a N50,000 investment can buy 10,000 shares, which is the perfect way to gain experience. This allows you to understand market dynamics and build your confidence.
Looking to jump into the Nigerian stock market but don’t have a ton of cash? Here are some penny stocks (stocks trading below N5 per share) to consider:
- For the cautious investor:
- Airtel Africa (N5,000 gets you under 23 shares): low volatility, good dividend history, may offer slow capital appreciation.
- For the income-seeker:
- GTBank (N5,000 gets you 1,000 shares): Potential for dividend payments and price appreciation.
- MTN Nigeria (N5,000 gets you over 230 shares): reliable dividend payer with a standard dividend policy.
- For the high-risk, high-reward investor:
- Honeywell Plc (N5,000 gets you over 15,000 shares): Potential for massive returns if the stock price surges, but no guaranteed dividends.
- Insurance stocks (which generally trade below N2 per share): a huge number of shares for your money, but be aware of low liquidity (difficulty selling) and the potential for stagnant or dropping prices.
Here are some specifically mentioned penny stocks:
- Abbey Mortgage (N2.70): Get 18,518 shares.
- ABC Transport (less than N1): Get over 50,000 shares.
- Academy Press (less than N2): Get over 25,000 shares.
- AIICO Insurance (cheap): Get over 40,000 shares.
- Chams Holdings PLC (N2.11): Get enough to play with.
- Cornerstone Insurance (less than N2): Get over 25,000 shares.
- CIleasing (N3.10): Get enough to play with.
- Custodian Insurance Plc (N10): Get up to 5,000 shares.
- Etransact (N5): Get 10,000 shares.
Remember: Penny stocks can be risky, so consult a stockbroker before investing.
