Shares represent your ownership in a company. When you buy shares from a company you become a part owner of that company. A person who owns shares in a company is known as a Shareholder. Owning shares earns you voting rights during shareholders meetings; you can vote to elect a board member, approve the issuing of new shares or payment of dividends.
The interest you earn from shares is known as dividend. Your dividend depends on how much shares you own. When the value of your shares appreciate it is known as capital gain and when it depreciates it is known as capital loss. Share values can appreciate or depreciate based on circumstances such as the financial position of the company, political changes, change of management among others.
“If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” – Warren Buffett. Shares are long term investments; this makes them very risky because of the uncertainty with the length of time. They do not have maturity dates.
As an individual, you cannot buy shares directly from the Stock Exchange, you will have to go through a brokerage firm. The brokers will buy the shares on your behalf. At the brokerage you will be required to open a securities account. Brokerage firms usually charge 2.5% of your transaction value as fees for their services. Some brokers in Ghana include CAL brokers, Ecobank Stockbrokers, Prudential Securities Limited etc.
Do not invest in a business you do not understand, seek advice from experts on which companies to buy shares from.