{"id":506,"date":"2020-07-24T10:39:45","date_gmt":"2020-07-24T09:39:45","guid":{"rendered":"http:\/\/mainstreetcapltd.com\/?p=506"},"modified":"2021-03-22T15:54:39","modified_gmt":"2021-03-22T15:54:39","slug":"investing-in-nigeria-series-stock","status":"publish","type":"post","link":"https:\/\/mainstreetcapltd.com\/sandbox\/blog\/investing-in-nigeria-series-stock\/","title":{"rendered":"INVESTING IN NIGERIA (Series)- Stock"},"content":{"rendered":"<!--themify_builder_content-->\n<div id=\"themify_builder_content-506\" data-postid=\"506\" class=\"themify_builder_content themify_builder_content-506 themify_builder tf_clear\">\n                    <div  data-lazy=\"1\" class=\"module_row themify_builder_row tb_0wqv375 tb_first tf_w\">\n                        <div class=\"row_inner col_align_top tb_col_count_1 tf_box tf_rel\">\n                        <div  data-lazy=\"1\" class=\"module_column tb-column col-full tb_vls7376 first\">\n                    <!-- module text -->\n<div  class=\"module module-text tb_01rf537   \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <h1><strong>WHAT ARE STOCKS?<\/strong><\/h1>    <\/div>\n<\/div>\n<!-- \/module text --><!-- module text -->\n<div  class=\"module module-text tb_y0r7508   \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <p>Stocks are a part of a company. They are an investment in a company and that company&#8217;s profits. Investors buy stock to earn a Return On their Investment (ROI). Simply put, when you purchase\u00a0a company&#8217;s stock, you&#8217;re purchasing a small piece of that company. Units of stock are called\u00a0<em>shares<\/em>.<\/p>\n<p>This entitles the owner of the stock to a proportion of the corporation&#8217;s assets and profits equal to how much stock they own.<\/p>\n<p>Stocks are a way to build wealth. Owing stock in some of the worlds most successful companies means you own a piece of that company and in some cases, it does mean you get a right to vote at shareholders meetings, if you choose to exercise that right.<\/p>\n<p>For example, if a company has 1,000,000 shares of stock outstanding and one person owns 100,000 shares, that person does not own the company but would own and have claim to 10% of the company&#8217;s profit and losses.<\/p>    <\/div>\n<\/div>\n<!-- \/module text --><!-- module image -->\n<div  class=\"module module-image tb_4909328 image-center   auto_fullwidth tf_mw\" data-lazy=\"1\">\n        <div class=\"image-wrap tf_rel tf_mw\">\n            <img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/mainstreetcapltd.com\/wp-content\/uploads\/2020\/08\/News-Blog-Post-Feature-Image-Template-1-min.png\" width=\"2240\" height=\"400\" alt=\"Infographic describing the definition of Stock, types of shares and How people earn from Stocks\">    \n        <\/div>\n    <!-- \/image-wrap -->\n    \n        <div class=\"image-content\">\n                        <div class=\"image-caption tb_text_wrap\">\n            Infographic describing the definition of Stock, types of shares and How people earn from Stocks        <\/div>\n        <!-- \/image-caption -->\n            <\/div>\n    <!-- \/image-content -->\n        <\/div>\n<!-- \/module image --><!-- module text -->\n<div  class=\"module module-text tb_5wk5703   \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <h2><strong>TYPES OF STOCK<\/strong><\/h2>\n<p>Common and preferred are the two main forms of stock; however, it&#8217;s also possible for companies to customize different classes of stock as hybrid stock in any way they want. The most common reason for this is the company wanting to manage voting rights of the investors or keep majority of voting power with a certain group; hence, different classes of shares are given different voting rights.<\/p>\n<p>A few things to note-<\/p>\n<ul>\n<li>Common Stock owners have voting right while Preferred Stock owners don\u2019t<\/li>\n<li>The Preferred Stock owners are prioritized over a companys income, so they are paid dividends before the common shareholders.<\/li>\n<li>Common Stock owners are paid out after out after creditors, bondholders, and preferred shareholders.<\/li>\n<li>Preferred stock functions similarly to bonds since with preferred shares, investors are usually guaranteed a fixed dividend in perpetuity.<\/li>\n<li>Preferred stock may also be callable, meaning that the company has the option to purchase the shares from shareholders at anytime for any reason (usually for a premium).<\/li>\n<\/ul>    <\/div>\n<\/div>\n<!-- \/module text --><!-- module text -->\n<div  class=\"module module-text tb_birf275   \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <h2><strong>WHY DO COMPANIES GIVE OUT SHARES?<\/strong><\/h2>\n<p>Companies need to give out shares to raise money.<\/p>\n<ol>\n<li>Raise money for business expansion- E.g. enter new markets<\/li>\n<li>Raise money for personal reasons- E.g. The founders need to create trustfunds for their children<\/li>\n<li>Raise money for research and developments of new product lines<\/li>\n<li>Raise money<\/li>\n<\/ol>    <\/div>\n<\/div>\n<!-- \/module text --><!-- module text -->\n<div  class=\"module module-text tb_2pn4308   \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <h2><strong>HOW DO PEOPLE EARN FROM STOCKS?<\/strong><\/h2>\n<ul>\n<li><strong>Sale of Stock<\/strong>&#8211; The stock\u2019s price appreciates, which means it goes up. You can then sell the stock for a profit if you\u2019d like.<\/li>\n<li><strong>Dividends<\/strong>&#8211; The stock pays dividends. Not all stocks pay dividends, but many do. Dividends are payments made to shareholders out of the company\u2019s revenue, and they\u2019re typically paid quarterly.<\/li>\n<\/ul>\n<h2><strong>HOW CAN YOU INVEST IN STOCKS TODAY?<\/strong><\/h2>\n<ul>\n<li>Visit a stockbroker<\/li>\n<li id=\"mntl-sc-block_1-0-21\" class=\"comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading\">Visit a money Manager<\/li>\n<\/ul>\n<p>This article is a part of the &#8220;Investing In Nigeria Series&#8221;. Sign up\u00a0<a href=\"https:\/\/c2deba6c.sibforms.com\/serve\/MUIEAE78Szs0T5jbM3d5EZ9Ipyk9nIhdChMH98zK4bLnZUqhmwJbvebL2cIXwZMp13BK-Qen3YF_JL2HQottNm2Tjh87niZIQRy3b2hSnh0cfgMDQaYLTxAN07ZnNej5XH_JH8SNYxE501YHKJOl8khwdGCZXEH2QlXX4S0keGUusZ0DVdXesieAoPsWbCoj9uKwqd4dbd_y438p\" target=\"_blank\" rel=\"noopener\">here<\/a>\u00a0to follow the series.<\/p>    <\/div>\n<\/div>\n<!-- \/module text --><!-- module text -->\n<div  class=\"module module-text tb_26rp291   \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <h2><strong>HOW CAN YOU INVEST IN STOCKS TODAY?<\/strong><\/h2>\n<ul>\n<li>Visit a stockbroker<\/li>\n<li id=\"mntl-sc-block_1-0-21\" class=\"comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading\">Visit a money Manager<\/li>\n<\/ul>\n<p>This article is a part of the &#8220;Investing In Nigeria Series&#8221;. Sign up\u00a0<a href=\"https:\/\/c2deba6c.sibforms.com\/serve\/MUIEAE78Szs0T5jbM3d5EZ9Ipyk9nIhdChMH98zK4bLnZUqhmwJbvebL2cIXwZMp13BK-Qen3YF_JL2HQottNm2Tjh87niZIQRy3b2hSnh0cfgMDQaYLTxAN07ZnNej5XH_JH8SNYxE501YHKJOl8khwdGCZXEH2QlXX4S0keGUusZ0DVdXesieAoPsWbCoj9uKwqd4dbd_y438p\" target=\"_blank\" rel=\"noopener\">here<\/a>\u00a0to follow the series.<\/p>    <\/div>\n<\/div>\n<!-- \/module text -->        <\/div>\n                        <\/div>\n        <\/div>\n        <\/div>\n<!--\/themify_builder_content-->","protected":false},"excerpt":{"rendered":"<p>Stocks are a part of a company. They are an investment in a company and that company\u2019s profits. Investors buy stock to earn a Return On their Investment (ROI). Simply put, when you purchase a company\u2019s stock, you\u2019re purchasing a small piece of that company. Units of stock are called shares.<\/p>\n","protected":false},"author":6,"featured_media":507,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,12],"tags":[24,25,16,15,23,22,17],"class_list":["post-506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-investing-in-nigeria-series","tag-common-stock","tag-dividends","tag-invest-in-nigeria","tag-investing-in-nigeria","tag-preferred-stocks","tag-shares","tag-stocks"],"builder_content":"<h1><strong>WHAT ARE STOCKS?<\/strong><\/h1>\n<p>Stocks are a part of a company. They are an investment in a company and that company's profits. Investors buy stock to earn a Return On their Investment (ROI). Simply put, when you purchase\u00a0a company's stock, you're purchasing a small piece of that company. Units of stock are called\u00a0<em>shares<\/em>.<\/p> <p>This entitles the owner of the stock to a proportion of the corporation's assets and profits equal to how much stock they own.<\/p> <p>Stocks are a way to build wealth. Owing stock in some of the worlds most successful companies means you own a piece of that company and in some cases, it does mean you get a right to vote at shareholders meetings, if you choose to exercise that right.<\/p> <p>For example, if a company has 1,000,000 shares of stock outstanding and one person owns 100,000 shares, that person does not own the company but would own and have claim to 10% of the company's profit and losses.<\/p>\n<img src=\"http:\/\/mainstreetcapltd.com\/wp-content\/uploads\/2020\/08\/News-Blog-Post-Feature-Image-Template-1-min.png\" width=\"2240\" height=\"400\" alt=\"Infographic describing the definition of Stock, types of shares and How people earn from Stocks\"> Infographic describing the definition of Stock, types of shares and How people earn from Stocks\n<h2><strong>TYPES OF STOCK<\/strong><\/h2> <p>Common and preferred are the two main forms of stock; however, it's also possible for companies to customize different classes of stock as hybrid stock in any way they want. The most common reason for this is the company wanting to manage voting rights of the investors or keep majority of voting power with a certain group; hence, different classes of shares are given different voting rights.<\/p> <p>A few things to note-<\/p> <ul> <li>Common Stock owners have voting right while Preferred Stock owners don\u2019t<\/li> <li>The Preferred Stock owners are prioritized over a companys income, so they are paid dividends before the common shareholders.<\/li> <li>Common Stock owners are paid out after out after creditors, bondholders, and preferred shareholders.<\/li> <li>Preferred stock functions similarly to bonds since with preferred shares, investors are usually guaranteed a fixed dividend in perpetuity.<\/li> <li>Preferred stock may also be callable, meaning that the company has the option to purchase the shares from shareholders at anytime for any reason (usually for a premium).<\/li> <\/ul>\n<h2><strong>WHY DO COMPANIES GIVE OUT SHARES?<\/strong><\/h2> <p>Companies need to give out shares to raise money.<\/p> <ol> <li>Raise money for business expansion- E.g. enter new markets<\/li> <li>Raise money for personal reasons- E.g. The founders need to create trustfunds for their children<\/li> <li>Raise money for research and developments of new product lines<\/li> <li>Raise money<\/li> <\/ol>\n<h2><strong>HOW DO PEOPLE EARN FROM STOCKS?<\/strong><\/h2> <ul> <li><strong>Sale of Stock<\/strong>- The stock\u2019s price appreciates, which means it goes up. You can then sell the stock for a profit if you\u2019d like.<\/li> <li><strong>Dividends<\/strong>- The stock pays dividends. Not all stocks pay dividends, but many do. Dividends are payments made to shareholders out of the company\u2019s revenue, and they\u2019re typically paid quarterly.<\/li> <\/ul> <h2><strong>HOW CAN YOU INVEST IN STOCKS TODAY?<\/strong><\/h2> <ul> <li>Visit a stockbroker<\/li> <li id=\"mntl-sc-block_1-0-21\">Visit a money Manager<\/li> <\/ul> <p>This article is a part of the \"Investing In Nigeria Series\". Sign up\u00a0<a href=\"https:\/\/c2deba6c.sibforms.com\/serve\/MUIEAE78Szs0T5jbM3d5EZ9Ipyk9nIhdChMH98zK4bLnZUqhmwJbvebL2cIXwZMp13BK-Qen3YF_JL2HQottNm2Tjh87niZIQRy3b2hSnh0cfgMDQaYLTxAN07ZnNej5XH_JH8SNYxE501YHKJOl8khwdGCZXEH2QlXX4S0keGUusZ0DVdXesieAoPsWbCoj9uKwqd4dbd_y438p\" target=\"_blank\" rel=\"noopener\">here<\/a>\u00a0to follow the series.<\/p>\n<h2><strong>HOW CAN YOU INVEST IN STOCKS TODAY?<\/strong><\/h2> <ul> <li>Visit a stockbroker<\/li> <li id=\"mntl-sc-block_1-0-21\">Visit a money Manager<\/li> <\/ul> <p>This article is a part of the \"Investing In Nigeria Series\". Sign up\u00a0<a href=\"https:\/\/c2deba6c.sibforms.com\/serve\/MUIEAE78Szs0T5jbM3d5EZ9Ipyk9nIhdChMH98zK4bLnZUqhmwJbvebL2cIXwZMp13BK-Qen3YF_JL2HQottNm2Tjh87niZIQRy3b2hSnh0cfgMDQaYLTxAN07ZnNej5XH_JH8SNYxE501YHKJOl8khwdGCZXEH2QlXX4S0keGUusZ0DVdXesieAoPsWbCoj9uKwqd4dbd_y438p\" target=\"_blank\" rel=\"noopener\">here<\/a>\u00a0to follow the series.<\/p>","_links":{"self":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts\/506"}],"collection":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/comments?post=506"}],"version-history":[{"count":28,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts\/506\/revisions"}],"predecessor-version":[{"id":1069,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts\/506\/revisions\/1069"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/media\/507"}],"wp:attachment":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/media?parent=506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/categories?post=506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/tags?post=506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}