Investing in the equity market offers chances for income and capital appreciation as well as exposure to and diversity within the various industries and sectors that drive the global economy.
The world’s top 500 richest people increased their total wealth by $1.5 trillion last year largely through their exposure in the global stock market, with Elon Musk, the CEO of Tesla Inc., making the largest contribution, accord to data from Bloomberg Billionaire Index
The tech-heavy Nasdaq and the S&P 500 both break records in 2021, with the Nasdaq surpassing its previous peak thanks to increases for Facebook’s owner Meta and the top AI chipmaker, Nvidia.
This year, the main index of Nigeria’s primary stock market, the NGX, broke through the psychological barrier of 100,000 index points for the first time. Despite recent setbacks, investors have gained almost N15 trillion naira this year.
Young people can benefit from stock trading in some ways, such as increased income, wealth creation, skill development, portfolio and income diversification, and access to international market opportunities and returns.
For younger people who have more time and are accustomed to using online resources and platforms, stock trading can be easy and accessible.
Exposure to and diversification to the various industries and sectors that propel the Nigerian economy can be obtained through stock market investments in Nigeria, these sectors include Telecommunications, Banking, Oil & Gas, Consumer Goods, Agriculture, etc.
Things to think about
Some segments and industries may fit diverse investment tastes and aims and offer varying growth potentials, risks, and rewards.
An investor may benefit financially from income and capital growth by making investments in the Nigerian stock market. Dividends, which are periodic payments paid by the business to its shareholders, typically consist of profits or reserves and are the source of income.
Over time, capital gains and dividends can both raise your assets and cash flow. You can also reinvest dividends and capital gains to purchase additional shares and boost returns.
The purchase of foreign equities from Nigeria also allows you to access possibilities and gains on the global market while diversifying your investment portfolio and also hedge against the naira.
Buying and selling shares of companies listed on a stock exchange is known as stock trading. Investing in stocks allows one to speculate on short-term price swings in addition to long-term financial gains.
Recent data from Statista indicates that around 60% of all stocks worldwide are traded on the US stock market. Japan is the second-largest stock market.
Capital gains and dividends from the stock market might provide extra cash. A company’s regular payments to its shareholders are known as dividends, and they are typically funded by earnings or reserves.
The profit you get when you sell stocks for more money than you originally paid for them is known as a capital gain. Over time, capital gains and dividends can both raise your assets and cash flow. You can also reinvest dividends and capital gains to purchase additional shares and boost returns.
Over time, stock trading can aid in wealth accumulation. In the long run, especially, stocks tend to yield better returns than other investment options like bonds and savings accounts. Compound interest is beneficial for stocks as well.
Eligible investors can pick up useful habits and abilities from it. Research, analysis, and decision-making regarding the businesses and markets you wish to invest in are all necessary for stock trading and in the long term improve your earning capability.
Discipline, endurance, and fortitude in the face of volatility and unpredictability are necessary for stock trading. You’ll benefit from these habits and abilities in other areas of your life as well, like education, employment, and personal finances.
You may diversify your portfolio and income by trading stocks. Capital gains the money generated from selling stocks at a higher price than they were originally bought, or dividends regular payments given by the company to its shareholders—can also be additional sources of income from stock trading.
This implies that you can lower risk and boost possible returns by distributing your funds among a variety of investment kinds. You can invest in equities of various businesses, sectors, nations, or locations, for instance.
Making the most of your time and the use of the internet makes it possible to invest in the global stock market. Compared to older people, younger people have more time to invest and develop their money.
Additionally, it extends the time an average resident might likely bounce back from any blunders or losses you might have when stock trading.
Furthermore, you probably grew up with a strong computer background and are accustomed to the internet resources and tools that make it simple and easy for you to access and trade stocks.
The article is written for educational purposes and may not be suitable for all. If you have any doubts as to the merits of an investment, you should seek advice from a SEC regulated entity.
