INVESTING RIGHT: BASICS

It’s never too early to begin to invest in stock or property. As soon as you leave university you should start putting a little money aside for investments. You can even ask your parents or family to buy shares in your name. Investment pays off in the long run. But, WAIT!!! There are few essentials to consider before buying shares:

1)      Know your worth. Give yourself a candid review of where you are financially- how much you have and owe, how much you have saved and how much you can reasonably save. Having a detailed idea of where you are financially will assist you determine if you can afford to take certain risks.

2)      Other factors to consider how much to risk when investing include your age, your monthly income, how many sources of income you have, if you have dependents and  the stability of the industry you work in.

3)      The market can be volatile. Value of investments rise and fall especially in the stock market. Before you invest, observe the market for a while and consider the options that fluctuate the least.

4)      Have the right attitude. The best investment decisions are made with intelligence and discipline and never with emotions. Do not rush to invest just because others are raving about something, or it seems to have a sudden boom in value. Be patient and do adequate study. When you invest, don’t just stop there. You need to monitor and review your investment regularly.

5)      Invest in sound companies. Invest in companies that have a history of strong profits and stable business structures.

6)      Diversify. Do not put all your investments in a single project. Dabble a little here and there; take advantage of all your options. While diversification may not always bring success, at least your risks are reduced. The chances of all your invested money going down the drain at the same time are very slim.

7)      Consider your alternatives before plunging in- which investments could bring more returns for less risk.

8)      Seek advice from a professional. If you can afford to, get an investment adviser. If you cannot, ask around for somebody who works in this field and seek their advice. You can also use newspapers and online investment sites to guide.

 

STOCK OF THE WEEK: NESTLE NIGERIA PLC.