How to make money from stock market, and you should get a stockbroker
We are in a COVID-19 infected economy, and smart people are buying companies at cheaper price. You might probably heard that Chinese are picking some US stock but you really don’t get the drift.
It means they are taking position for potential upside at a cheaper amount per share. Don’t get emotional, that’s how smart investors think and behave!
In Nigeria, with negative real return on investment securities, it will cost more money to keep less amount going forward.
Negative return on investment means that yield on securities are not enough to cover inflation rate.
Buy that buying things is cheap today, but the same amount would get you less than it would get for you today.
And COVID-19 intrudes into human affairs
Things get worst. The coronavirus pandemic has made life unbearable, having infected the economy with lockdown, there is a bumpy road ahead.
Investing in stocks could be all that is needed for you at this point in time. You think it is risky?
The coronavirus has also proven that life is also risky!
The difference is, you can always put price on risk associated with your investment.
Uncertainty, on the other hands, cannot be priced and that is what COVID -19 ushered into the world.
The pandemic has reset economic metrics, and it looks like the world has shifted to the most disadvantage side.
Where should I invest?
For you, not in the fixed income market. Inflation rate continues to rise, and yield on investment securities have been lowered.
Real return on fixed rate investment securities would put you in a negative position.
In other words, yields are not providing cover for weak purchasing power as it used to be.
Okay, what about stock market?
Few Nigerians deal in the local bourse. So, technically stock market has not been benefitting from population advantages.
Why? About 90 million Nigerians are poor, the Nigerian Bureau of Statistics recent report has revealed.
But that it is just is just 40% of the population size. Where are the others that are not poor by this standard?
They are not in the stock market, unfortunately. However, they are somewhere else – lotto and game betting. It is quickie, we love it so much in this space.
Now, if you don’t have any form of investment, be getting ready for a rough ride in 2020.
Pitching the stock market:
Stock prices have bottomed, and this is the time for you to enter the market. If you are looking at any kind of investment to provide reasonable return, then stock market is your best bet.
But, it is not gambling like, don’t expect it to exhibit lotto features. The truth is, it would not.
Instead, expect a price decline and when you see that happening, sophisticated investors would automatically buy more.
That sounds stupid right? No, it is not. Stock prices always move in waves. When your stock prices drop, buy more because when it start swinging up, it would be easier to wipe off initial loss.
A good investment it is!
Many people don’t really know, but assuredly, stock market is a place you can make money.
However, returns on the amount you invest depends on how long or short your investment horizon is.
Meanwhile, you could lose. Dividend payout ratios of companies differ, and there is no rule.
Going short may mean that you will be disappoint as the only way to make money is for stock to appreciate.
Yes, the market has been volatile and there are uncertainties that cannot be priced in the financial market.
Macroeconomic condition is weak and the outlook isn’t anything better either.
Should be scared? Yes. You have to be when it comes to dealing with investment. No, because nothing taking risk means not expecting any upside.
Worst still, not taking risk means taking all other risks that are not planned for.
If there is anything that people desire in life, it is to live above poverty level. Meanwhile, you cannot achieve financial freedom overnight.
Knowingly or unknowingly, people commit economic blunders. Handling money or building wealth isn’t their things, yet they crave to be wealthy and free.
Some people are addicted savers. They are very much comfortable keeping millions in their Banks.
They don’t understand. It cost money to keep money. You lose when you save money in bank as inflation wipe off purchasing power so easily.
In the past, when T-Bills yield was as much as 15%, financial illiterates, the natural savings addicts would put millions they don’t need in 3-6months or even a year in bank.
That’s an error!
You just exchanged 15% return for hampers at the end of the year, which has been the case with some people.
Why? Addicted savers refusal to take risk means no reward. At the moment, any investment return less than 13% cannot close inflation gap.
If you are not earning above average inflation rate, that investment is eating your money.
The gist is, your savings is working like slaves on the mine fields. Without taking risk, your hard earned money will always equal to your hard earned income.
With a little risk, your hard earned cash flow will equal your hard earned cash flow plus soft return on investment.
Money goes to where it is treated well. Money earns money!
Stock market remains where people are going to be making money in 2020. If you are hungry for success, yearning to build wealth, then start taking position.
Meanwhile, always watch your back. Stock market is not a place to gamble. If you want to live right, you must have alternative sources of income.
Speculating platform? That’s how many people see buying and selling of shares! Nonsense, they say! I once had a negative impression about stock market investment too.
Many investors have been affected but many times of capital gains and dividend cannot be compared.
What do you do when you have small ants up the hill and elephants at the bottom?
You have to do what savvy investors are doing. They stick to the game! Size does matter but technology is closing information gap in the stock market.
All you need is to reach out, research and follow up with trend. Taking position in the stock market is not a bad idea.
Someone would say real estate instead. You are right but stock provides liquidity than real estate investment.
For example, you can set aside ₦50, 000 for stock market investment few stocks and watch it grow under a stockbroker supervision.
Fat bulls often enter stock market- No one usually see it coming – and it will give so much milk and beef for salivating investors.
Dividend is an investor’s milk, capital gain is the beef and Bulls offer the two!
Sometimes, a stock may be in the red zone and afterwards turn green. In each sector, listed companies have identity.
Well, when next you are looking for a good investment that could give your some good returns, you might have to look at some cheap stocks.
Their movements are very expensive.
Watch out for this page as I will be telling you where people are investing their free cash flow, and a lot of financial literacy expose to your advantage.
Here is the golden rule if you want to try your hands in the stock market: Don’t buy shares and keep.
Trade on it as that has proven to be a better approach than keeping stock certificates under lock.
If you need lists of stockbrokers that can help in your quest to create wealth, reach out to: ogochi.ndubuisi@dmarketforces.com or text: 08112626316
How to make money from stock market, and you should get a stockbroker
