Active investing in Nigerian stocks is an investment strategy that involves a hands-on approach to portfolio management.

Practice active investing in Nigerian stocks for free on the Trades Trek Stock-Trading Simulator. Available on Android and IOS.

Unlike passive investors who buy stock to own it for a long time. An active investor constantly monitors the market and executes trades frequently, in an attempt to outsmart the market. Active investing in Nigerian stocks involves extensive research and financial analysis before making decisions. Day Trading is an example of active investing on the Nigerian stock market, where investors trade securities within a trading day, to make profits from short-term market fluctuations.

Strengths of Active Investing

1. Risk Management: Investors can adjust investment strategies in response to market trends and prevailing conditions. This will help reduce portfolio exposure in the time of market downturns.
2. Potential Higher returns: Investors take advantage of short-term market fluctuations to generate higher returns investment.
3. Increased control: Passive investors  may rely on index funds. Active investors have control over their investments. They choose what stocks to trade based on their analysis

Drawbacks of active investing

1. High Cost: frequent trading by active investors, leads to high brokerage and tax fees. This is dependent on the online stockbroker an investor uses.
2. Loss of capital: Timing the stock market can be difficult and if not done right can result in significant capital loss. Active investors may lose out on potential gains market gains in the future.
3. Minimum investment balance: Active funds set a minimum starting balance for new investors. And this could be as high as 100,000NGN or 10,000NGN depending on the fund.

FREE STOCK-TRADING SIMULATOR

Practice different investment strategies used on the Nigerian stock market for free without risking your own money. Download Trades Trek Stock-Trading Simulator for free on  Android and IOS