BANKING

How to Invest in Stocks | Best Guide for Beginners

Published

1 year ago

How to Invest in Stocks | Best Guide for Beginners

Welcome to our guide on how to invest in stocks! If you’re new to the world of investing, the stock market can seem intimidating and overwhelming. But with a little knowledge and understanding, you can confidently invest in stocks and potentially earn significant returns on your investment.

In this guide, we’ll provide a comprehensive overview of the basics of stock investing, including what stocks are, how to buy and sell them, and key strategies for maximizing your investment. Whether you’re a beginner looking to get started or an experienced investor looking to expand your portfolio, this guide will provide you with the information you need to make informed decisions about your investments.

How to Start Investing in Stocks

Investing can help you grow your wealth over time. One way to do this is through the stock market, which offers the opportunity to buy shares in companies and potentially earn returns through dividends and capital appreciation. If you’re new to investing, here are some steps you can take to get started:

Define your risk tolerance

Consider how much risk you are willing to take on in your investments. Different types of stocks come with different levels of risk, so you should choose the ones that match your risk tolerance. Determine how much money you can comfortably invest in stocks. Keep in mind that investing in stocks carries inherent risks, so it’s important to only invest money that you can afford to lose.

Decide on your investment goals

Think about what you want to achieve with your investments. Are you saving for retirement, a down payment on a house, or something else? Make sure your investment strategy aligns with your goals.

Determine your investing style

Consider whether you want to be actively involved in managing your investments or if you prefer a hands-off approach. You can manage your portfolio yourself, work with a financial advisor or broker, or use a robo-advisor to automatically invest for you.

Choose your investment account

There are several types of accounts you can use to invest in stocks, including 401(k)s, IRAs, taxable brokerage accounts, and robo-advisor accounts. To buy and sell stocks, you’ll need to open an account with a brokerage firm. There are many different online brokers to choose from, each with its own fees, commissions, and investment options. Do your research and compare several different firms to find the one that best meets your needs.

Learn to diversify and reduce risk

Diversification means investing in a range of assets to reduce the risk that one investment can have a severe impact on your portfolio. Mutual funds and ETFs are a good way to diversify, as they allow you to invest in a large number of stocks at once.

Start investing

Once you have a plan in place, it’s time to start investing. Research different stocks and consider consulting with a financial advisor or broker if you need guidance. Monitor your investments regularly and make adjustments as needed to stay on track towards your goals.

Educate yourself

Before you start investing, it’s important to understand how the stock market works and the different types of stocks available. Research different investment strategies and consider taking a course or reading books on the subject to gain a deeper understanding.

Consider using a financial advisor

If you’re new to investing or don’t feel comfortable making investment decisions on your own, you may want to consider working with a financial advisor. They can help you create a personalized investment plan and guide you through the process of buying and selling stocks.

Keep an eye on fees

Brokerage firms and financial advisors charge certain fees for their services. These fees can sometimes eat into your returns, so it’s important to carefully consider how much you’re paying and whether it’s worth it.

What is the Minimum to Open a Brokerage Account?

To open a brokerage account, you may need to meet a minimum deposit requirement set by the financial institution. This means that you will need to deposit a certain amount of money in order to have your account application accepted. Different financial institutions may have different minimum deposit requirements, so it is a good idea to compare options and find one that meets your needs.

Some firms do not have minimum deposit requirements, while others may offer incentives such as reduced fees or a certain number of commission-free trades if you have a higher balance. It is important to thoroughly research and compare your options to find the best brokerage account for you.

What are the Costs & Fees Associated with Stocks Investment?

Here are some of the fees and charges you should know about when investing in stocks:

Commissions and Fees

Economists often state that there is no such thing as a free lunch, and this is also true in the world of stock trading. Brokers need to make a profit and they typically do this by charging a commission for each trade, whether it is a buy or sell.

These fees can range from a few dollars to as much as $10 per trade, and they can have a significant impact on your portfolio’s return and the amount of money you have available for investing, especially if you trade frequently. Some brokers may offer commission-free trading, but they may compensate for this by charging other fees.

Mutual Fund Loads

One important thing to consider when investing in mutual funds is the fees associated with them. One such fee is the management expense ratio (MER), which is a percentage of a fund’s assets that goes towards covering the costs of managing and running the fund. The MER can range from a low of 0.05% to a high of 2% per year, depending on the fund. It’s important to keep in mind that a higher MER can eat into the fund’s overall return.

In addition to the MER, mutual funds may also have sales charges, also known as loads. These can include front-end loads, which are fees that are charged when you buy into the fund, and back-end loads, which are fees that are charged when you sell your shares. It’s important to check whether a fund carries a sales load before you invest in it, and you may want to consider investing in no-load or no-transaction-fee funds to avoid these charges.

For beginning investors, mutual funds can be a good option because they offer diversification and professional management, and the fees may be more manageable than the commissions charged when buying individual stocks. Plus, you can usually start investing in a mutual fund with a smaller amount of money compared to what you would need to buy individual stocks.

What Are the Risks of Investing in Stocks?

Investing in stocks involves taking on risk in exchange for the potential to achieve a financial goal in the future. The level of risk can vary, with some types of investments carrying more inherent risk than others. It is important for investors to consider how they can manage risk in order to reach their financial objectives, whether they are short-term or long-term. It is always a possibility that the value of your investment may not increase over time, so it is important to carefully evaluate the risks involved in any investment decision.

How Do Commissions and Fees Work?

Commissions and fees are a common charge among brokers for each trade made by their customers. These fees can range in cost, with some reaching up to around $10 per trade. To minimize expenses, investors often limit the number of trades they make in order to avoid incurring additional commission fees. In addition to commissions, certain investments such as exchange-traded funds may also carry fees to cover the expenses of managing the fund.

The Bottom Line

As a beginner investor, it is possible to invest in stocks even with a small amount of money. However, it is important to do your research and consider factors such as your investment goals, risk tolerance, and the costs associated with investing in stocks and mutual funds. It is also advisable to compare different brokers and choose one that meets your needs and requirements. By taking the time to properly prepare, you can potentially reap the financial rewards that stocks have to offer over the long term.

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BANKING

Afreximbank Acts as Joint Lead Manager on Ecobank Transnational Incorporated’s USD 400mn Senior Unsecured Note Issuance

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The proceeds of the note will fund general corporate purposes of the issuer, including refinancing of a USD350 million senior bridge-to-bond loan facility that was jointly coordinated by Afreximbank in March 2024.

African Export-Import Bank (“Afreximbank”) (www.Afreximbank.com) is pleased to announce that it has successfully acted as Joint Lead Manager and Bookrunner on a USD 400 million 10.125% Rule 144a/RegS senior unsecured note issuance by Ecobank Transnational Incorporated (“ETI”) due in October 2029.

The note issuance achieved peak orderbook oversubscription of 2.1x, backed by more than 70 high-quality and diverse investors comprising development finance institutions, asset managers, commercial banks and insurance companies from Africa, the UK, USA, Europe and the Middle East.

Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, commenting on the transaction, said: “We are pleased to have supported Ecobank Transnational Incorporated (“ETI”) in placing the first public Eurobond issuance by any Sub-Saharan African financial institution since 2021, following our bridge financing support earlier in the year. This transaction underscores Afreximbank’s capacity and readiness to structure innovative market access solutions for our pan-African banking partners.”

Afreximbank’s Advisory and Capital Markets (ACMA) department acted as Joint Lead Manager and Bookrunner on the issuance, working alongside international and African partners.

Distributed by APO Group on behalf of Afreximbank.

BANKING

International Islamic Trade Finance Corporation (ITFC) and the Central Bank of Nigeria Successfully

Published

2 months ago

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International Islamic Trade Finance Corporation (ITFC) and the Central Bank of Nigeria Successfully

These workshops form part of ITFC’s Integrated Trade Solutions (ITS) framework, aligning with the organization’s goal of providing holistic trade financing interventions in OIC member countries.

The International Islamic Trade Finance Corporation (ITFC) (www.ITFC-idb.org), a member of the Islamic Development Bank (IsDB) Group, in partnership with the Central Bank of Nigeria (CBN), successfully concluded a workshop on Non-Interest Banking and Trade Finance in Nigeria. Held from 17th to 19th September 2024 in Abuja, the sessions aimed to enhance capacity and knowledge in Islamic banking principles, trade finance products and services, and how different financial toolkits are applied in Islamic finance from operational and business perspectives.

International Islamic Trade Finance Corporation (ITFC) and the Central Bank of Nigeria Successfully

Nigeria’s Islamic finance industry, valued at US$3.8 billion, is one of the major Shariah compliant industries in Africa. Despite some challenges such as low public awareness and a smaller capital base compared to conventional banks, Islamic finance has been substantially contributing to reduce financial exclusion and improve access to affordable finance in the country. The three-day workshop was designed to bridge prevailing knowledge gaps focusing on key areas such as Sukuk issuance and main non-interest banking products basics.

Delivered under ITFC’s Integrated Trade Solutions framework, the workshop equipped professionals with the skills to promote Islamic finance in Nigeria while also highlighting ITFC’s wide range of trade financing services.

Participants reported a significant boost in understanding Islamic banking and trade finance, and the workshop showcased ITFC’s contributions to economic development through sustainable financial solutions.

Eng. Nasser Al Thakair, ITFC, remarked: “ITFC is committed to supporting Nigeria’s efforts in Islamic finance, tailoring this workshop to address the unique challenges faced. We will continue to provide the expertise and financial backing needed to grow Islamic finance in Nigeria and beyond.”

Over 30 professionals from the Central Bank of Nigeria, non-interest banks, and other financial institutions attended, further advancing Islamic finance in the country.

As Nigeria positions itself as a leading market for Islamic finance in Africa, ITFC remains dedicated to advancing trade finance and supporting the growth of the sector for long-term economic impact.

Distributed by APO Group on behalf of International Islamic Trade Finance Corporation (ITFC).

About the International Islamic Trade and Finance Corporation (ITFC):

The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the primary objective of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving the socioeconomic conditions of the people across the world. Commencing operations in January 2008, ITFC has provided over US$75 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs. With a mission to become a catalyst for trade development for OIC member countries and beyond, the Corporation helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity-building tools, which would enable them to successfully compete in the global market.

FINTECH

Kazang Pay launches card acquiring service in Zambia

Published

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Kazang (www.Kazang.com), the prepaid value-added services (VAS) and card acquiring business within JSE-listed fintech Lesaka Technologies, has launched its Kazang Pay card acceptance solution for merchants in Zambia. Kazang Pay makes it affordable for merchants to accept card payments on the same Kazang terminal they use to sell prepaid products and services.

Kazang Pay launches card acquiring service in Zambia

The Kazang Pay enabled terminal in Zambia accepts VISA debit and credit cards as well as mobile wallet payments. Payments are settled to the merchant’s Kazang wallet on the same day. It’s as easy as letting the customer tap or insert their bank card and enter their PIN on the secure scramble PIN pad.

Kazang operates around 12,000 VAS terminals in Zambia. The goal is to enable the majority to accept card payments over the next six months. Benefits to merchants include low transaction fees and no monthly terminal rental fee for those that meet a modest monthly transaction threshold as well as the opportunity to grow their business through card acceptance.

Kazang is Zambia’s largest VAS point-of-sale terminal provider, enabling mobile money payments, bank and mobile money cash in and out, bill payments, airtime, Zesco, and many other prepaid services on one platform. The addition of card acceptance makes the platform even more comprehensive for merchants and consumers alike.

The launch of Kazang Pay in Zambia follows the introduction of the solution in South Africa, where around 60,000 small and micro merchants use Kazang Pay to accept card payments. In Zambia, there are around 3.8 million debit, credit and ATM cards in issue and 41,000 point of sale (POS) terminals in place. The value of POS transactions has grown to K 111.4 billion by 2022 from less than K 20 billion in 2018, according to the Bank of Zambia.

Says Leon de Wit, managing director at Kazang Zambia: “Zambia has made enormous strides in terms of financial inclusion, with card usage and penetration growing at a rapid pace. With Kazang Pay, merchants can now easily accept card payments on the same all-in-one terminal they already use for vending of VAS products.

“Card transactions help merchants to grow basket sizes and potentially attract more customers, and at the same time, reduce the risks and costs of handling cash. Moving towards digitalised payments will also enable merchants to track sales, manage cash flow, and create a footprint that could make it easier for them to access loans.”

Ashley Naidoo, director of Kazang Pay in South Africa says: “Our Zambian merchants have eagerly embraced our card acquiring service as a valuable part of our one-stop solution. Following the launch of Kazang Pay in Zambia, we have seen higher VAS sales across our merchant base and much-improved merchant retention and with our card acquiring solution we now appeal to a broader merchant base.”

Distributed by APO Group on behalf of Kazang.

ABOUT KAZANG:
Kazang (www.Kazang.com) is a leading provider of cash and digital solutions to merchants in Southern Africa’s informal economies. Our fintech solutions include a diverse range of value-added services (VAS), card acquiring, secure cash vaults and supplier payments platforms. Operating with a network of approximately 90,000 active devices, we process approximately 2.2 million transactions daily in markets such as South Africa, Namibia, Botswana, and Zambia.

We are dedicated to helping small and medium merchants grow and succeed, through increasing their sales, making their businesses more efficient and reducing their risks with its holistic portfolio of products and services. Kazang is a member of Lesaka Technologies (https://LesakaTech.com).

ABOUT LESAKA TECHNOLOGIES, INC:
The Connect Group and Kazang was acquired by Lesaka Technologies, Inc. in April 2022. Lesaka Technologies, (Lesaka™) is a South African Fintech company that utilizes its proprietary banking and payment technologies to deliver superior financial services solutions to merchants (B2B) and consumers (B2C) in Southern Africa. Lesaka’s mission is to drive true financial inclusion for both merchant and consumer markets through offering affordable financial services to previously underserved sectors of the economy. Lesaka offers cash management solutions, growth capital, card acquiring, bill payment technologies and value-added services to retail merchants as well as banking, lending, and insurance solutions to consumers across Southern Africa.

Lesaka has a primary listing on NASDAQ (NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock Exchange (JSE: LSK). Visit www.LesakaTech.com for additional information about Lesaka Technologies (Lesaka ™). $LSK / $LSAK