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It’s been some years since I started investing in the Nigerian Stock Market and though there’ve
been ups and downs, in all it has been a very interesting and beneficial experience. The tales
abound; some of regrets and quite a number of profits and joy. But in it all, there have been distinct
lessons (from my own personal experiences and from others) which could not have been learnt any
other way, and which have made me a much better investor. It is these tips learnt during my ups-
and-downs that I now share with you in the hope that you might avoid some of those mistakes I
made.
No Matter What Else You’re Doing, Make Sure You Have Some Investments
I have friends who in the early days refused to join the ‘League of Xtraordinary Gentlemen’ (stock
market investors) because they “would rather invest the money in a business”. Now I have nothing
against that, but today when I consider that while we both rank pari passu in terms of business, not
only do I have my stock market investments but also more funds to put in a business – since my
investments have multiplied –, I know that it was I who made the right choice. There’s no law that
says you shouldn’t invest in the stock market because you’re trying to build a business. Even Bill
Gates has other investments in the market apart from Microsoft. Investments in stocks can serve as
a backup and cheap source of funds for your business, and a backup can allow you to be more
daring. In addition, you can even use your shares as collateral to take loans. With shares, it’s a win-
win situation.
Don’t Leave Excess Cash Hanging with Your Stockbroker (or anywhere else in fact)
There’s almost nothing worse than being caught in a bull market with excess/unutilised cash.
Having a little in savings for chance opportunities does not mean forgetting it with the broker.
What’s the point of making your broker rich with interest from your money? If you’re going to
leave your money stagnant, you might as well leave it in your bank account and earn the puny
interest for yourself. But really, your research should be constant so that at every point in time, you
have an option of buys. As I compose this article, I’m wondering what to do with some money
which has been earning interest for my broker for about a month now. I regret not having bought
more of some particularly good stocks when they were cheaper and now, with the bulls going
bonkers, it’s hard to find good stocks to buy.
Believe In Yourself
Maybe you did some research and discovered that a particular stock has prospects even though
everyone feels otherwise; maybe your gut feelings tell you to buy a particular stock; maybe you
feel – with reason – the bottom is going to fall out of a particular stock even though the whole
planet is going gaga over it; whatever it is, sometimes you’ve got to believe in yourself and
yourself alone. Great men – and very rich men – are those who don’t mind standing alone.
Remember the Japaul story? But even earlier than that, I learnt to believe in myself. I remember
when STB (now UBA) came out with its IPO some years back. I asked my dad for advice and he
was totally against it. Well, I went ahead and bought it at N4 and I can still remember the look on
his face some months later when I informed him I had just sold my shares for N6.80. I really didn’t
know much about stocks then, but I was convinced I was doing the right thing and it paid off
handsomely. Of ‘cos, you might not always be that lucky especially if your decisions are totally
based on pure speculation. But I’ve found that with some research, strong intuition, patience and
belief in ones’ self, anyone can make money in the market.
Just Do It
My most important lesson from the stock market and probably the greatest advice I’ll ever give to
anyone: JUST DO IT! Don’t wait till you have more money; don’t wait for the price to go down;
don’t wait till it’s Christmas; don’t even wait to see if the bulls will return; once you’ve seen the
stock of your heart, just go for it. The money you’re waiting for might never come; the price might
just begin an uphill climb; Christmas prices might just disappoint you; and the bulls may recover
faster than you think. Let Shakespeare’s words motivate you: Fortune favours the brave.
So these are the lessons I’ve learnt from my own meandering experience. Very simple huh? Well
the most important lessons are always the easiest, ask Isaac Newton. Try them out, free of charge,
and your path might just be straighter. Good luck!