Economy
Major Steps a Retail Investor Must Take to be Successful Consistently
Retail investors are amateur, individual investors who use brokerage firms or their own funds to make investments.
When it comes to investing, retail investors need to be aware of a few things. They must do due diligence and test the waters before committing because the majority of them lack the experience and information needed for investment. The following investing advice can assist you as a retail investor in making wise decisions and maximizing your investment.
Set a financial objective
Like piloting a ship without radar, investing without a financial objective is foolish. Financial objectives provide the framework for your investments and aid in determining the types of investments you should make to meet them. Depending on your objectives and the sum required to reach them, you must invest.
Short-term
The time frame for short-term objectives is between six months and a year. These objectives can include planning a trip or putting together an emergency fund. You can think about making an investment in liquid funds or bank fixed deposits to help you achieve short-term objectives.
Medium-term
Approximately three to five years are needed to accomplish medium-term objectives. These objectives can include saving money for a down payment on a home. You could invest in aggressive hybrid funds for medium-term objectives.
Long-term
Long-term objectives are at least 15 to 20 years distant. These objectives include retirement, children’s further education, and other things. You can invest in pure equity funds to achieve long-term objectives as they have the potential to outperform inflation over time.
Use a reputable investment broker
One of the most important factors to consider when choosing a broker is the regulation or licensing that they possess. Make sure the organization you are working with is approved and regulated by a government body. If they are, you won’t have any trouble opening an account with them.
On the other hand, before using the broker’s license, you should make sure it is real and in good standing. In other words, if the license is current and you’re working with a registered broker, you won’t have any problems trading the financial markets.
Start Little
Starting small and spreading out your assets is advised for regular investors. This is especially true if this is your first time making an equity investment. A volatile asset class is equities. If you start out losing a lot of money, investing becomes a painful process.
It is preferable to begin with systematic investment strategies if this is your first time using mutual funds to invest in stocks. This assists you in maintaining your investment throughout market cycles, building up more units during bear markets, and developing disciplined saving habits. Long-term investment commitment reduces volatility’s magnitude.
Be patient
On the other hand, it’s crucial to avoid losing interest in your assets too soon. Because of this, you can pass up fantastic opportunities because you think it’s too late or get impatient waiting for the stock to move.
Long-term returns can be improved by taking a more cautious and methodical approach to constructing your portfolio. However, expecting a portfolio to do a task for which it is not equipped will only lead to disappointment. Keep in mind reasonable expectations for the expansion of your portfolio and future rewards.
Tame your emotions
Emotions have no role in financial decisions. In the long run, investing objectively can increase your wealth and screen out underperformers from your portfolio. Most retail investors let their emotions influence their decisions, which they later regret. Greed takes precedence during a bull market, and most investors end up investing at exorbitant values.
On the other hand, when the market is in a bear phase, many investors panic and flee. Both actions are not desirable. When you give in to your emotions, reason becomes secondary. When you tend to invest emotionally, you lose sight of the big picture.
Avoid following the crowd
Herd mentality is rather typical. Those impacted unquestioningly copy the investments made by others. The outcomes might be severe. Keep in mind that there is no one-size-fits-all strategy for investments. Financial objectives, risk tolerance, and cash flow are all unique to each person. Because of this, what works for someone else might not work for you. You don’t have to chase after the stock or fund that everyone else is. Be sure to consider your goals and financial situation before making a call. You may avoid herd mentality by using logic and discipline.
To sum up
Being in control of your investments can be achieved by avoiding these blunders. They also guarantee that you are on the road to financial freedom and assist you in navigating difficult situations with ease.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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