Benefits of stock investment are numerous. Some of these benefits are realized in the short term while some are realized in the longer term. Some of the benefits include; 1. Dividends 2. Bonus shares 3. Capital appreciation 4. Voting right 5. Collateral 6. Protection against inflation 7. Semi-liquid investment 8. Right issue 9. Ease of transfer 10. Base asset 11. Good savings
DIVIDENDS: At the end of a fiscal year, the company calculates the profit it made and pays you some money out of it (called dividends) depending on the number of shares you have in the company, don't forget that you still own and keep your shares, you are just being paid part of the profits because you are a shareholder.
BONUS SHARES Bonus shares are extra shares given to you in addition to the number of shares you already have in the company. This is a good way of increasing the number of shares one has in a company and many companies do this a lot. In 2007,Zenith bank plc gave a bonus of 1 for 4 (1: 4), this means that if you have 10000 units, you are given extra 2500 units to make your total stock equal to 12500. Also in 2008 Julius Berger plc gave 3 for 1 (3: 1). That is if you have 10000 units, you are given extra 30000 to make your total holdings in Julius Berger equal to 40000 units. This is very good.
CAPITAL APPRECIATION: This means increase in the value of your money/capital. Say you bought 10000 units of a stock at N2, if it gets to N12, you can sell and get N120000, but you initially spent N20000. Like in January 2007,bank PHB was selling at about N2.50 but by July 2007, it was selling at 25.if you had bought in January; you can sell in July and make 1000% gain. Imagine the profit. If you invested N100, 000, you will get N1, 000,000.So much money.
VOTING RIGHTS:
If you own shares in a company, you have the right to attend their annual general meetings (AGMs). At the meetings, you have the right to vote for or against a decision the directors want to make. You can also vote for people to be appointed as directors and you also have the right to submit yourself for election into administrative and executive positions in the company. Generally, you have a say in how the company is managed because you have shares in it. AGMs are also nice place to network with people of like minds and higher status in the society. I advise you to go for AGMs; you have a lot to gain from them.
COLLATERAL: When you are in need of money for a project, you can use the stocks you have as collateral to borrow money from banks and other financial institutions. This serves a wonderful purpose because you will get money to carry out the project you want, make profit, and still retain your shares after settling the bank loan.
