A practical introduction to investing in publicly quoted securities

Investing in publicly quoted securities is one of the most accessible ways for individuals to participate in the growth of businesses and governments while building personal wealth over time. Yet for many, the capital market still feels complex or “not for people like me.” This guide breaks it down in simple terms, what these securities are, the main types you can invest in, and how to get started in Nigeria.

Investing isn’t just about “buying shares and hoping for the best.” At its core, it’s about intentionally putting your money into financial assets that can grow your wealth or generate steady income over time. One of the most common ways to do this is by investing in publicly quoted securities.

What are publicly quoted securities?

Publicly quoted securities are financial instruments officially listed and traded on recognized, regulated exchanges. Being “publicly quoted” means their prices are publicly available, and eligible investors can buy or sell them through licensed intermediaries such as stockbrokers.

In Nigeria, the major regulated trading platforms include:

1. NGX (Nigerian Exchange Group): The primary platform for trading equities (shares of listed companies) and other instruments such as ETFs and certain debt securities. This is where most retail investors interact with the capital market.

2. FMDQ securities exchange: A market for fixed income securities (government and corporate bonds), treasury instruments, currencies, and certain derivatives. It plays a key role in Nigeria’s debt and money markets and is widely used by institutional investors.

3. AFEX (Africa Exchange): Focused mainly on commodities and commodity-backed instruments, supporting price discovery and structured trade in agricultural and energy products.

Broadly speaking, securities are financial assets or instruments that can be traded on a regulated exchange. Regulation matters because it promotes transparency, protects investors, and reduces the risk of fraud and sharp practices.

Types of securities you can invest in

Different securities serve different financial goals and risk profiles. Not all investments behave the same way, each comes with a different balance of risk, return, and purpose. Broadly, they can be grouped into these main categories:

• Equities (Shares): Equities represent ownership in a company. When you buy shares, you become a part-owner (shareholder) and may benefit from:

- Capital appreciation: when the company grows and its share price increases.

- Dividends: a share of the company’s profits, when declared.

Equities generally offer higher long-term return potential but come with higher volatility. Prices fluctuate based on company performance, market sentiment, and broader economic conditions. While riskier than fixed income, equities have historically delivered stronger long-term growth.

• Fixed Income Securities (Bonds & Treasury Instruments): These are debt instruments that pay investors a predetermined return over a specified period. They are commonly used for income generation and capital preservation. In simple terms, bonds are loans given to an entity in exchange for periodic interest and repayment of principal at maturity.

Common examples include:

- Government securities: FGN Bonds, Treasury Bills, and FGN Savings Bonds.

- Corporate bonds: Debt issued by companies to finance operations or expansion. These typically offer higher yields than government bonds but carry higher risk.

- Eurobonds: Foreign currency-denominated bonds issued by governments or corporates, often traded on FMDQ or OTC markets. If you earn or hold dollars and don’t want them sitting idle, they allow you to earn returns in foreign currency and diversify currency exposure.

Fixed income investments are generally less volatile than equities, with government-issued instruments considered safer than corporate debt. They are often suitable for investors who prefer more predictable returns. 

• Exchange-Traded Funds (ETFs): ETFs are investment vehicles that track a basket of assets, such as an index, sector, or bond portfolio.

- They provide instant diversification.

- They are traded on the stock exchange like regular shares.

- They are useful for investors who want broad market exposure without picking individual stocks.

• Mutual Funds: These pool money from multiple investors and are professionally managed.

Investors gain exposure to diversified portfolios of equities, bonds, or mixed assets. They are suitable for beginners or those who prefer a hands-off approach.

Performance depends on the fund’s strategy and the skill of the fund manager.

• Derivatives (Advanced Securities): Derivatives are contracts whose value is derived from underlying assets such as equities, bonds, commodities, or currencies. They are mainly used for hedging and risk management and are more suitable for sophisticated or institutional investors.

Choosing what to invest in: what really matters

What you invest in should be intentional not driven by hype or trends. Three key factors should guide your decisions:

1. Your investment goal: Are you investing for short-term needs, long-term wealth building, retirement, or capital preservation?

2. Your risk appetite: How comfortable are you with fluctuations in value? Can you tolerate temporary losses in exchange for higher long-term returns, or do you prefer stability?

3. Your currency exposure: Do you want naira-denominated assets, foreign currency assets, or a mix?

For example, if you want low-risk, accessible investments, FGN Savings Bonds are a good starting point, you can invest with as little as ₦5,000, and new offers are typically opened to retail investors monthly (check the Debt Management Office website for timelines).

Smart investing is about alignment: if your goal is long-term growth and you can handle volatility, equities may make sense; if stability and income are your priority, fixed income instruments may be a better fit.

How to invest in the Nigerian capital market

You don’t trade directly on the exchange as an individual. All transactions go through SEC-licensed stockbrokers or investment firms who are members of the market.

Thanks to fintech apps and online trading platforms, investors can now place trades and track portfolios digitally, think apps like Bamboo, Risevest, or Trove. However, behind every platform is still a licensed broker executing the orders. The platform is the interface; the broker is the regulated gateway.

Practical steps:

• Choose a SEC-registered stockbroker or investment adviser. The Securities and Exchange Commission (SEC) regulates the Nigerian capital market. Verify licensed operators on the SEC website to avoid fraud and unregistered firms.

• Get properly profiled: Before investing, a good broker will:

- Carry out KYC (Know Your Customer) checks.

- Help clarify your financial goals.

- Assess your risk tolerance.

- Provide market insights and portfolio guidance.

Your broker isn’t just there to place trades, they are there to help you avoid costly mistakes and build a strategy that fits your financial reality.

Risk: the one thing you should never ignore

Every investment carries risk. There’s no such thing as “guaranteed high returns with zero risk”, that’s usually a red flag. The smarter approach is to:

• Understand the risks associated with each asset class.

• Diversify instead of putting all your money into one instrument.

• Match your investments to your risk appetite and time horizon.

If market swings keep you up at night, your risk level is probably too high. Investing should support your life goals, not stress you out.

Final thoughts

Investing in publicly quoted securities isn’t reserved for institutions or the ultra-wealthy. With the right information, broker, and understanding of your goals and risk tolerance, everyday individuals can participate in the capital market and build long-term wealth.

The market rewards patience, discipline, and informed decision-making. Start small, stay consistent, and let time do some of the heavy lifting. The real edge is not in “hot tips,” but in understanding what you’re investing in, why, and how it fits your long-term financial goals.