Having financial freedom or financial independence I believe is the dream of everyone and it is something that we should all consciously and actively work towards. It may seem difficult to achieve, but it is not unattainable. There are myriads ways to attain financial freedom and investment in stocks is just one of them. Investment in stocks has many advantages although it has it’s own downsides.
One such advantage is that, investment in stocks is convenient that even if you are very busy with your work or other things you can still be able to put your money to work and earn some extra income. For example, a Lecturer, a student, or a commercial driver who is busy with their work or studies, who may also not necessarily have a huge capital to start up their own businesses, investing in the stock market is a perfect option.
Secondly, investing in the stock market does not necessarily require that you have a huge amount of money or capital. You can start with any amount and then you build up on it over time. This particularly works for those who seek to make a longterm investment. For example, investing for a 5 years or 10 years period or more.
Another positive is that, you have the opportunity to earn money in two ways. Either by buying low and selling high (ie. buy stocks at lower prices and then you sell at higher price) which is called capital gain. Or you do a longterm investment where you get paid dividends over the period for which you hold the stock. A dividend is part of a company’s profit that it distributes to it’s share holders.
Fourthly, investing in stocks is one of the best way to insure your money or savings against inflation. Knowing that the quantity of things you bought in 2018 with 2000 Cedis will not be the same quantity of things you can buy in 2020 with the same money. Then investing in stocks can somehow help you to overcome this lost in the value of you money over time.
Also, you get the opportunity to invest and partner with the companies you love. For instance, you may like the Fanmilk company, MTN or Unilever and wish you had the opportunity to run such a company or work with them. However, with the constraint of a starting capital this may not be possible. You can therefore partner with these companies by buying their share and become part owner of the business.
However, investing in the stock market as I mentioned earlier is not without its downsides. It can be risky and you may lose your entire investment should the company you invested in performs bad. And for those who are into buying low and selling high you would be putting yourself in an emotional roller coaster. Nonetheless, all of these risks can be minimised with the help of a professional broker with a commission of between 2% to 2.5% of your investment.
Now lets dive into how to invest on the Ghana stock exchange market.
Investing in the stock market although may sound and seem sophisticated, it is actually easy and can be done in the following steps.
1. First you have go to any licensed brokerage house in Ghana to open a security trading account. Cal brokers, Stanbic bank brokerage, FirstBanc Brokerage and Prudential bank and are just some examples of licensed brokers in Ghana.
2. Here you will be asked to fill a form with your personal information supported by an ID (ie. passport, or Voter ID, driving licence or National ID), your bank details and a passport photo.
3. After opening your trading account, you then choose the stocks or mutual funds in which you want to invest in. You should do some research personally or with the help of your broker in order to choose well promising and profit potential stocks.
4. The next step is to transfer funds into your trading account. This can just be done through a direct wire transfer from your bank account into the trading account which you have with the broker.
5. Now you are ready to make your first purchase. Simply submit a trade order to your broker instructing him on which stocks or shares you want to buy and the amount you are willing to spend. This can be done via email or a face to face appearance at the broker’s office.
6. Lastly, focus on the longterm. Unless you are looking to deal in day trading, it is advisable to not be always checking you stocks everyday to see how they are doing and instead focus on the longterm.
Start investing today, start now! Hope you found this article helpful. Kindly leave your comments and thoughts below. Thank you