Invest with a right attitude

By Ola Emmanuel - updated: Thursday 28-08-2008

The beauty of investment is that its objectives (short term or long term) are realised. Therefore, experienced investors do have proper perspective of investment options before releasing their funds to invest. It is often too disturbing if projections fail. In this wise, when an experience investor is putting down his money to invest, he would have answered one of the most important questions, ‘for how long am I investing this fund?’ and in answering the question, he would have known whether the money will be needed so urgently or it can be allowed to stay on for a longer period in the investment option. I am convinced it is this lesson that the Nigerian stock market is teaching greater percentage of Nigerian investors, with what has been happening in the market since March 2008 when the market went spiralling and nose-dived.

In the concept of ‘letting money work for you’, the idea is not about abandoning one’s primary duty – or role – to money. What do I mean by this? When you are to send money on errand, it means that what you send on errand is not the totality of what you have. What you send on errand should be an integral part of your total financial resource. You must still be involved actively, using your energy to manage the big chunk of the resource. By so doing, you will not be boxed into a corner and desperately be looking for a way out when an investment is languid in performance or ‘southly’ in outlook. As an entrepreneur, you have the income generation platform that you directly manage, supervise, control, and monitor to yield good fortunes to you. It is out of the yields of this directly-managed business that you send on errand through available investment options to go and bring more yields.

But Nigerian investors, especially the new breeds, do not include this reality when investing in option markets. They tend to hold on to wrong perception that once they invest, within few days or months, the money should have multiplied greatly and bring good yield to enjoy with – just like that. The language is: ‘I want to make ‘cool’ money’. New generation Nigerians don’t include patience (or allow time) in their quests to make money. Hmmn! But the law of productivity and resource enlargement does not totally agree with that belief. Even God wants to see how good, rational and of what moral fibre you are made of before entrusting great wealth into your care.

Come Into The Market With Right Spirit:
When investing in the stock or money market (or any other option) unless you are a professional trader in the market, be prepared to invest for a medium to a long term period. Avoid investing money you cannot afford to let play for few years. A market may decide to turn southward at times before heading northward, or interchanging these directions. If what you invest is not what you need desperately urgent to meet other pressing needs, then you will not end a loser in the markets. But if your life – all you live for – revolves around the remote investment markets, disappointment cannot be ruled out at times.

The performance of stocks on the floor of the Nigerian Stock Exchange since the first quarter of the year, lends credence to today’s gist. Some stocks that are toasts of investors have lost price greatly. You can imagine the feeling of someone who bought Japaul Oil for N15 few months ago and the price was N4.62 or stocks like Unity Bank that was valued at N3.61 at the close of last week trading. Even new stocks are not spared the bad moments. Omatek listed few weeks ago was down to N2.34; Starcomms down to N8.26 from an Olympian height of N13.65; Fidson Healthcare plummeting to N5.32 from N7.50 listing price. If all your life is in this market, you can imagine the quality of living you are saddled with!

Add knowledge to ability. You will be better for it.

Till Sunday, enjoy my pen and stay financially fit.