Questions
What is a stock market?
The stock market is a marketplace where investors can buy and sell shares of publicly listed companies. It plays a crucial role in the economy by enabling companies to raise capital.
How do I start investing in the stock market?
To start investing, you need to open a brokerage account through a license stock broker, like Midpoint Capital Limited, deposit funds, and then place orders to buy stocks.
What are the trading hours of the Nigerian Exchange Limited?
The trading hours of the Nigerian Exchange Limited is between 9:30 AM and 2:30 PM (WAT), Monday to Friday, except on public holidays.
Who is a stockbroker, and how do I choose one?
A stockbroker is a licensed professional who buys and sells stocks on behalf of investors.
What are dividends?
Dividends are payments made by a company to its shareholders, usually from profits. They are distributed regularly, typically ones or twice annually, and represent a return on investment for shareholders.
What is market capitalization?
Market capitalization refers to the total value of a company's outstanding shares of stock, calculated by multiplying the share price by the number of shares. It reflects the company's overall market value.
What is the difference between stocks and bonds?
Stocks represent ownership in a company, while bonds are a form of loan to a company or government. Stocks may offer higher returns but come with greater risk, while bonds provide fixed interest payments and are considered safer.
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How can I hedge my stock market investments?
Hedging involves using strategies like options, futures, or investing in non-correlated assets to protect against potential losses in the stock market.
What is a stock split?
A stock split increases the number of a company’s shares by dividing each existing share, while its market capitalization remains unchanged. This often makes shares more affordable to investors.
Why do companies issue preferred shares?
Preferred shares offer investors a fixed dividend, and they have priority over common shares for dividend payments and during liquidation. Companies issue them to raise capital while offering lower risk to investors.
What is sector rotation in stock investing?
Sector rotation involves shifting investments between different industry sectors based on market conditions and economic cycles to maximize returns.
How do geopolitical events affect stock markets?
Geopolitical events, such as elections, wars, or trade agreements, can lead to uncertainty and market volatility, as they may influence economic policies, trade flows, and investor sentiment.
What are growth stocks?
Growth stocks are shares of companies expected to grow at an above-average rate compared to the market. These companies typically reinvest profits to fuel further expansion, offering potential for high returns.
How can interest rate changes affect stock prices?
Rising interest rates can make borrowing more expensive for companies, potentially slowing growth and reducing stock valuations. On the other hand, lower interest rates can stimulate economic growth and boost stock prices.
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