Economy
Navigating the Complex World of Investing: What Novices Need to Know
Have you finally decided to take the leap into the exciting arena of investing? Not only is this an excellent way to secure a lucrative nest egg for the future, but many have begun to use these opportunities as a springboard for their businesses.
However, appreciating the intricacies of online trading is no easy task. A great deal of preparation will be required and mistakes can occur on occasion. This is why knowing where to begin is one of the best ways to establish strong foundations. Let us therefore cut through a fair amount of “fluff” and examine a handful of strategies that have already been embraced by experts.
Determine How Much You Can Comfortably Afford to Invest
Comfort is king (and queen) in terms of investing. It is always prudent to establish how much you can afford to trade at any given time. You might otherwise stretch your finances too thin and suffer from a lack of liquidity (especially if you have become involved with long-term positions).
Many experts recommend placing no more than ten percent of your available capital into an investment at any given time. Even if losses do occur, you will not be placed in fiscal jeopardy. This also helps to avoid mistakes that can be made when trading based on emotions as opposed to pragmatism and logic.
Consistency is Key
As opposed to other online articles that you might have encountered from time to time, the chances of becoming a millionaire overnight are virtually non-existent. Any successful investor understands that accruing liquidity requires time and effort. This is when the power of consistency comes into play. Set a trading schedule and stick to it. One novel way to develop this level of clarity is to employ an economic calendar. These handy tools will enable you to prioritise specific positions and to appreciate how your individual investments are performing from a longitudinal perspective.
Balance Your Portfolio
All of us aim to achieve a balanced lifestyle and this is just as relevant in terms of investing. Any type of trading portfolio should hold a number of different asset classes at any give time. Examples include traditional stocks, commodities… Even if one asset happens to perform poorly, the gains associated with others can be used to mitigate any potential losses. This is sometimes referred to as “hedging” within financial circles. It may also be wise to work in tandem with a third-party wealth management firm. These companies will provide targeted recommendations based on your short- and long-term goals. Thus, it can serve as a helping hand even for expert investors.
Set Realistic Milestones
What is it that you are ultimately trying to achieve? Are you solely interested in short-term profits or might you instead wish to develop a well-rounded retirement package? Note that clearly establishing your goals will have a profound impact upon the types of investments that you make as well as the most appropriate asset classes. For instance, those who view their investments from a multi-year perspective might gravitate toward holdings such as shares in Apple or precious metals, as they normally are more stable than other alternatives.
Having said this, be realistic with your goals. Appreciate that even seasoned veterans have accrued wealth over decades as opposed to relying upon luck or the movement associated with a handful of trades. Establishing practical milestones will also enable you to gauge your progress and to make any changes that may be warranted. This likewise brings us to the final point.
View Errors as Learning Experiences as Opposed to Setbacks
Experts such as Warren Buffett are well aware of the fact that errors can and will emerge from time to time. Novice investors are essentially left with two choices. They can either walk away from a position or use the scenario to further hone their talents. Mistakes represent some of the most lucrative learning opportunities if viewed in a constructive manner, even if it sounds too difficult to understand just after they were made.
As more people begin to understand the advantages that online investing can offer, we should expect to witness an influx of younger traders who are eager for success. Still, Rome was not built in a day. The good news is that there are countless resources to be found across the Internet if you are keen to learn more. Furthermore, do not hesitate to bookmark this article for future reference if desired.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited suffered its first loss this week with a 0.46 per cent decline on Friday, influenced by profit-taking.
The market was under selling pressure yesterday, with all the key sectors of the bourse closing in red when the gong was struck by 2:30 pm.
The commodity index was down by 1.94 per cent, the insurance sector depreciated by 0.22 per cent, the industrial goods space lost 0.18 per cent, the consumer goods counter went down by 0.05 per cent, the energy industry tumbled by 0.02 per cent, and the banking sector fell by 0.01 per cent.
As a result, the All-Share Index (ASI) contracted by 498.56 points to 108,733.40 points from 109,231.96 points and the market capitalisation retreated by N314 billion to N68.339 trillion from N68.653 trillion.
The market participants traded 459.2 million equities valued at N11.2 billion in 15,723 deals on Friday versus the 554.1 million equities worth N14.4 billion traded 16,704 deals in the preceding session, implying a decrease in the trading volume, value, and number of deals by 17.13 per cent, 22.22 per cent, and 5.87 per cent apiece.
Tantalizers traded 101.4 million shares for N237.3 million, GTCO exchanged 51.3 million equities worth N3.5 billion, Access Holdings transacted 45.2 million stocks valued at N975.3 million, Zenith Bank sold 21.8 million shares worth N1.1 billion, and Sterling Holdings transacted 15.5 million equities valued at N91.8 million.
The heaviest price loser was Transcorp Power with a decline of 9.98 per cent to settle at N328.50, Haldane McCall fell by 9.57 per cent to N4.25, Meyer lost 9.09 per cent to trade at N8.00, Regency Alliance dropped 6.78 per cent to finish at 55 Kobo, and Sunu Assurances crumbled by 6.73 per cent to N4.99.
On the flip side, ABC Transport chalked up 10.00 per cent to quote at N2.86, Sterling Holdings also expanded by 10.00 per cent to close at N6.05, Chellarams improved by 9.94 per cent to N10.40, Academy Press gained 9.92 per cent to finish at N4.32, and Red Star Express appreciated by 9.90 per cent to N5.55.
Business Post reports that a total of 34 stocks appreciated, while 32 stocks depreciated, indicating a positive market breadth index and bullish investor sentiment despite the loss recorded by Customs Street during the session.
By Adedapo Adesanya
Four stocks weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.46 per cent on Friday, May 9, bringing down the market capitalisation by N9.02 billion to N1.935 trillion from N1.944 trillion quoted at the preceding session, as the NASD Unlisted Security Index (NSI) dropped 15.42 points to settle at 3,304.74 points, in contrast to the 3,320.16 points recorded a day earlier.
Central Securities Clearing Systems (CSCS) went down by N1.28 during the trading session to finish at N22.60 per share versus Thursday’s value of N23.88 per share, FrieslandCampina Wamco Nigeria Plc lost N1.00 to close at N40.03 per unit compared with previous closing value of N41.03 per unit, Geo-Fluids Plc depreciated by 11 Kobo to end at N1.81 per share versus the previous session’s N1.92 per share, and UBN Property Plc shrank by 4 Kobo to trade at N1.96 per unit, in contrast to the N2.00 per unit it was sold in the preceding day.
However, the price of Impresit Bakolori Plc went up by 11 Kobo yesterday to close at N1.27 per share versus the previous day’s price of N1.16 per share.
The volume of transactions went down on Friday by 33.1 per cent to 231.6 million units from the 346.3 million units recorded a day earlier, the value of trades decreased by 31.3 per cent to N606.4 million from N882.8 million, while the number of deals increased by 256.3 per cent to 57 deals from 16 deals.
At the close of trading activities, Impresit Bakolori Plc remained the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, followed by Geo-Fluids Plc with 265.8 million units valued at N469.5 million, and Okitipupa Plc with 153.6 million units sold for N4.9 billion.
Similarly, Okitipupa Plc was the most traded stock by value (year-to-date) with 153.6 million units worth N4.9 billion, trailed by FrieslandCampina Wamco Nigeria Plc with 19.9 million units valued at N765.5 million, and Impresit Bakolori Plc with 533.9 million units sold for N520.9 million.
By Adedapo Adesanya
The Naira was relatively flat against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, May 9, though it marginally shed 0.2 per cent or 7 Kobo to settle at N1,609.64/$1, in contrast to the preceding day’s N1,609.57/$1.
Also, the Nigerian Naira traded flat against the Pound Sterling and the Euro in the official market during the session, remaining unchanged at N2,145.48/£1 and N1,818.42/€1, respectively.
In the same vein, the value of the domestic currency to the Dollar remained unchanged in the parallel market yesterday at N1,625/$1, according to data obtained by Business Post.
As for the cryptocurrency market, it remained positive as President Donald Trump announced a comprehensive trade deal with the UK and the cumulative inflows into the spot exchange-traded funds (ETFs) hit a record high above $40 billion.
According to market analysts, this has led to substantial liquidations of bearish short positions, or leveraged plays aimed at profiting from price losses. A position is liquidated or forced closed when the trader’s account balance falls below the required margin level, often due to adverse price movements. This leads the exchange to close the position to prevent further losses automatically.
Meanwhile, the US and China are said to be working on a trade deal but many are skeptical of a deal being reached this month.
Dogecoin (DOGE) appreciated by 7.6 per cent to sell at $0.2229, Litecoin (LTC) improved its value by 5.5 per cent to quote at $103.51, Binance Coin (BNB) rose by 4.6 per cent to $663.22, and Solana (SOL) recorded a 3.6 per cent growth to sell at $171.52.
Further, the price of Ripple (XRP) went up by 1.4 per cent $2.37, Ethereum (ETH) jumped by 0.8 per cent to sell for $2,366.49, and Cardano (ADA) gained 0.7 per cent to trade at $0.7952, while Bitcoin (BTC) went down by 0.3 per cent to $103,670.89, with the US Dollar Tether (USDT) and the US Dollar Coin (USDC) trading flat at $1.00 each.
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