This article was written to create a good school for investors, the advanced participants and beginners in the activities of the financial markets. It serves as advisory requirements for existing shareholders, all of who may have one question or the other, at one time or the other to be answered. With this final episode of investing in shares in the introductory level, you’re ready to go on investing.
Surveys show that many professionals in public practice are not only losing current benefits of participating in the management of public companies but are also missing the focus of providing for tomorrow when the ability to run up and down have worn out. Dedicate the next 15mins to helping yourself out with the necessary details to get started.
In terms of stock exchange, there are impersonal and personal operators that play pivotal roles in the capital market. A bull may be referred to as an individual who buys on a short term in the hope that the price of the shares so purchased will rise to enable him make a profit when he is to eventually dispose them off. A bear, on the other hand, is an individual who sells shares in the belief that when he will replace them, prices would have fallen. This action of quantity selling can affect the confidence of the public to the effect that price will indeed fall and then rush to sell, bringing about the situation of supply being greater than demand, and eventually occasioning an actual fall in price, though again, for only a short period. Among the operators, we have stockbrokers, brokerage agents and stockjobbers which may help prosecute the assignments of a brokerage house. Now that you have understood what shares are, and what they all entails in terms of activities, let’s get you started with how to buy shares and how to manage your portfolios.
BUYING &SELLING OF SHARES
When buying shares, the investor may obtain the relevant form from any bank, stockbroker, or other accredited agents. If you’re buying from the secondary market, obtain a transfer form from the broker. Ensure that your signature on the transferee line is regular. It is important to keep a copy of the signed form for future reference. Some of the information and documents which you may be required to supply may seem funny or unnecessary to you, try to comply. They are for your ultimate security. Once you have secured your shares, get a contract note which must be in respect of each transaction detailing the elements of price and costs of the transaction as extracted at trading on the floor of the exchange.
In order to sell your shares, your shares must have been registered into your account with a capital market security and innovative solutions provider. To do this, obtain a transfer form from your broker, sign your regular signature on the transferor’s line, as you complete the other parts of the form. You are also to complete and sign a mandate to sell form. The broker will job the shares for disposal at the exchange. A willing buyer and a willing seller may also take part in cross-deal in the custody of a broker.
MANAGING OF PORTFOLI SIZES
Achieving goals requires what they will cost. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation to be invested in stocks, bonds cash and alternative investments. The allocation should also take into consideration, the personal risk profile of every investor since risk attitudes vary from person to person.
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