Stories by Chinenye Anuforo
Wealth creation can be achieved through a variety of means or a combination of some, but investment in stocks remains a highly attractive option, any time, any day. If you have suffered losses before in stock market, it has not changed the fact about stocks.
In reality, stock market still offers a unique opportunity for wealth-building, except when one fails to understand the market. So, whichever way it goes, the stock market is still a potent force to build wealth. There are many attractions to stock investing, but let’s list just four.
Generally, the stock market can yield very high returns. Granted that losses do occur, an investor that builds a strong portfolio can hope for better returns than available from, say, bank deposits.
Investment in stocks is relatively flexible than that of real estate. For instance, you need a sizeable chunk of money, even to buy a shop. That would tend to exclude a lot of people. For stocks, everybody is a winner. With just N500, you can find stocks to buy on the Nigerian Stock Exchange. Those low-priced stocks have, often, achieved the highest market yields. So, there is no excuse, so to speak. The processes of buying or indeed selling are also not cumbersome. More importantly, you can sell bits of your holding if you have to. If you buy 1000 units of a stock today and need some cash tomorrow, you can sell 200 units if that will meet your need.
They are less cumbersome to manage unlike some investments that will require your direct involvement on a continuous basis. If you opened a restaurant or some other business, no matter how small, you will be tasked to manage it. Even when you engage somebody, the burden of oversight will still bug you. With share investing, you are generally spared these worries. Public companies usually have a competent management team and other staff and an appointed Board to direct its affairs. Granted that you will monitor the market, this is nothing to compare to the challenge of a personal business or other personal investments.
Risk diversification
Even with just N5,000, you can spread your holding into a few sectors of the market to minimise risk. If, on the other hand, you set up a pharmacy shop even with a lot more money, you will still have more difficulty spreading out your risk. A hit on that sector will readily leave a major impact on your fortune. With shares, you can invest some in pharmaceutical companies to benefit from any boom in that sector, while plugging some into other sectors. A hit on the pharmaceutical sector will only affect part of your investment, that is, if you fail to quickly exit.
To reap from stock investing
If you have decided that stock investing should feature in your investment portfolio, here are some steps to take:
•You need a stock broker. Only licensed stockbrokers can buy or sell shares on the Nigerian Stock Exchange. If you must buy shares, you need an account with a broker. Just be careful to select a knowledgeable, honest broker and one that understands customer management. Your broker will also provide a lot of needed investment guidance. Licensed stockbrokers are on the NSE and SEC websites.
•You need investment education. This is not to ask you to go back to school. But it means you must begin to take interest in news and information about the economy, stock market and individual companies, which, luckily, is readily available: newspapers, business magazines, TV channels, online, publications of companies and the exchange, word-of-mouth, etc. It will also profit you a great deal to know the basics about stockholding and market behaviour.
•Set your goals as to what you want to achieve. A long-term perspective will always be a wise approach, but act according to your objectives. If you need help, your broker is a good place to start.
•Decide and take action. No idea, no matter how brilliant, can get you anywhere, until you begin to take action. Mistakes may be made, but see them as tuition fees if money is lost. Over time, if you have learnt the ropes, you are likely to recover them several fold.
Diamond Bank to reward customers with N584m in promo
Diamond Bank Plc has said that it will reward 1,005 customers with N584 million in season nine of its loyalty scheme -DiamondXtra- which is set to kick-off in January, 2017.
According to Osita Ede, Head, Mass Market Segment, Diamond Bank, at the launch of the season nine and November month end draw to wind down season eight, over five thousand customers of the bank have been rewarded with N4 billion in the last years when the promo started.
He explained that part of the focus of the promo is to instill savings culture in Nigerians and so far , that has been happening. “We have noticed that more people are saving; we noticed people open accounts for their kids, which was not the tradition before. Over the years, we have seen a whole lot of things in the right direction.”
He said that for the 12 months, the bank ran the promo for season eight, it opened above 450,000 accounts and “these are fresh customers, who would have probably save the money under their pillows, but they deposited the money with the bank and some of them have been steady in their savings. So it is a positive development.” Explaining the modality for season nine, he said that every month-end, 13 customers will win N1 million each; one customer will win N2 million, while the luckiest customer will win Salary4Life (One hundred thousand naira every month for the next 20 years).
“There will be five regional draws to ensure that winners emerge from every region in Nigeria and in each of the regional draws, 41 customers will be rewarded. While 30 of them are expected to win N500,000 each, 10 customers will win N1 million while, the luckiest will smile home with a brand new car.
“In addition to the monthly and regional draw, two special draws will be held to celebrate key milestones during the year and for each of the special draws, 30 customers will win N1 million each.
This season, there will also be a draw for Diamond Women where 10 female customers will be rewarded. We will continue rewarding associations, organizations, clubs and societies with our targeted draws scheme,” Ede added.
At the month-end draw to wind down the season eight of the draw, 13 customers of the bank emerged winners of N1 million cash prize; one customers went home with N2 million, while another one carted away Salary4Life. Prizes were also presented to winners of the Lagos regional draw held in November and the star prize winner of brand new SUV drove home his car.
SEC to colaborate with EFCC on market infraction
The Securities and Exchange Commission (SEC) is working on a Memorandum of Inderstanding (MoU) with the Economic and Financial Crimes Commission (EFCC) to provide an efficient and effective policing of the capital market.
This was disclosed by the Director General of SEC, Mounir Gwarzo, when the management of the Commission paid a visit to the acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, in Abuja.
Gwarzo disclosed that there has been a close relationship between the SEC and the EFCC adding that the Commission cannot discharge its responsibility effectively without collaborating with the anti graft agency.
He said: “We are by provision of our law mandated to protect investors on developing the market but the way our law is structured, we have limitations over criminal cases and that is why, in the last 10 years, there has been a very great collaboration between both agencies.
“We hope that when his MoU becomes fully operational, it will assist in reducing market infractions to the barest minimum.”
Gwarzo remarked that the collaboration with the EFCC has been of tremendous benefit to the SEC especially in areas of investigation and enforcement, adding that effective policing of the market is one of the ways of retiring investor confidence.
“One of our agenda is to bring back the retail investors to the market and there is no way they will agree to return if they are not sure of the safety of their investments,” Gwarzo stated.
Responding, the EFCC boss expressed delight that the collaboration between both agencies has yielded enormous benefit for the growth of the capital market adding that his agency will continue to provide assistance where required.
Magu said the EFCC has been instrumental in investigating several cases of fraud in the capital market and recovered funds which were returned to investors and assured the SEC of the Agency’s continued support