The Nigerian Exchange (NGX) Limited has advised investors to consider long-term investments, for maximum returns from those on listed companies.
The Head, Market Surveillance/Investigation, NGX Regulation, Mr Abimbola Babalola, gave the advice at a virtual training to commemorate the 2021 World Investor Week (WIW) by the NGX, on Friday in Lagos.
The training had as its theme: Financial Literacy: How to Start Investing in the Capital Market.
Babalola also advised investors to take out time to study the companies to stake an investor’s money on.
He said that it was advisable to visit the company’s offices, know the products, understand the risk return and attend the company’ AGM.
Babalola said financial systems are made of intricate and complex models that portray financial service institutions and markets that link fund users with investors.
He said that investors should only get associated with registered professionals for proper investment guidance to avoid unhealthy investment decisions.
Explaining the importance of the capital market to economic growth, Babalola said: “There are empirical evidences that show a strong positive relationship between economic growth and efficient capital markets.”
”The development recorded in Lagos State is as a result of the government coming to the capital market to raise funds for developmental purposes.”
“Local Governments can also do the same by utilising the capital market to raise funds for development as well,” he said.
Babalola highlighted some of the benefits of being listed on the NGX as access to growth-enabling capital, broader diversification of financing options and access to long-term financing at competitive rate.
Others include higher public profit and visibility, enhanced transparency and integrity.
Mrs Bunmi Olarinoye, Executive Director and Head, Equities Dealing, Stanbic IBTC Stockbrokers Ltd., said that the purpose of setting funds aside as investments was to gain future value.
Olarinoye said it was not advisable to invest money that would be needed on a regular basis but only funds that was set aside after settling basic needs like rent, food, utilities and transport.
She also said: “At an early stage in life, one is expected to invest more in risky and none volatile securities like stocks as earnings or income is stable at that stage.”
“As one draws closer to retirement, older individuals usually sway towards less risky securities like bonds where income or principal is guaranteed.”
“The reasons to invest represents those things that move you to invest and what you intend to spend your profits on, like family, properties, education, vacation among other,” she added.
Our correspondent reports that the NGX, along with the training held series of engagements to commemorate the 2021 WIW.
WIW is a global campaign to raise awareness of investor education and protection, promoted by the International Organisation of Securities Commissions (IOSCO) and The World Federation of Exchange (WFE).