#StockKlass : WEEK FOUR: Welcome to Stockman Training Center. All Rights Reserved.
Good morning Tweep,
You can share, retweet & ask questions.
To ask question(s) use d hashtags #StockKlass #InvestEdu.
This would help us address all questions.
The Thread starts here.
Good morning Tweep,
You can share, retweet & ask questions.
To ask question(s) use d hashtags #StockKlass #InvestEdu.
This would help us address all questions.
The Thread starts here.
1. In our previous #StockKlass, we established dt self-discipline is key for successful savings & investment culture. We also emphasized d need for clear investment objective & investment goal as important factors as well. These were our focused areas in first class #InvestEdu
2 .In 2nd & 3rd #StockKlass, we focused on stocks investment and understanding stock market. i.e. we tried to relate How stock works, and how stock market works too. We made it clear that it is vital for you to learn the art of stock investing. #InvestEdu
3. and understand d underlying pitfalls before going into participating in stocks investing as market is filled with landmines. We also made assertions in dt stock market is a game of numbers, not 4damentals always. You would understand what this means as we proceed #InvestEdu
4.Having said this, today's #Stockklass would focus mainly on #InvestmentRisks. We may touch rules & strategies to handle the pitfalls if space permits us. We shall start this by putting investment risk in proper perspective as related to stock investing largely #InvestEdu
5.Please note this is not meant to scare you away, as market is full of landmines, so is full of immense opportunities- the more reason you need to learn how to play the game and harness these opportunities. #InvestEdu
6.The idea is to make you understand what stock is, the market, be fully aware of the risks, your risk appetite level and invest accordingly. #InvestEdu
7.Apart from d core risks associated with market (Inflation Risk, Liquidity Risk & Market Risk ) dt you can easily deploy diversification strategy to tackle, we shall highlight some soft #InvestmentRisks dt u may not take serious dt may lead to unsuccessful positions. #InvestEdu
8.(1)FIND OUT ABOUT ALL CHARGES AND FEES. From experience, we discovered that a lot of people are not aware of the RISKS associated with FESS & CHARGES stock investments. A man once gave me N55million to invest in stocks on his behalf. #InvestEdu
9.The man later changed his mind to invest only N5million after I put him through HOW CHARGES WORK(Your broker makes money first). He later opened up dt N50million out of N55million was not his money. And he was not ready to expose such fund to uncertainty. #InvestEdu
10. So, it is important you are clear about what you are going into. The truth is few or no stockbrokers will let you know this- because they live on commission from every transaction. So telling you this is tantamount to throwing money away. #InvestEdu
11.(2) THE POSSIBILITY OF LOSING ALL THE MONEY. Before u start stocks investing, it is important 2be fully aware dt as u can make money, u can as well lose all d money invested, particularly if you are timing the market. Do not doubt this, it happened in 2008 & 2009. #InvestEdu
12.(3) SPECULATION OR TIMING THE MARKET INCREASES YOUR CHANCE OF LOSSING. Please note dt market is not designed for speculators but for long term investors to build lasting & enduring wealth. Most time dt u speculate, u make more money for ur broker only not 4urself. #InvestEdu
13. In all honesty, at purchase point, you will part with about 2.5% of your money in form of commission and other regulatory charges to both broker and government - Your broker makes money first while your profit is not guaranteed or certain, #InvestEdu
14.Irrespective of ur position, broker keeps making money as you move-in-and-out of market i.e. whether you make profit or not, you stand to part with minimum of 4% of ur money as buy & sell commission on single transaction (Buy and Sell)- this is standard anywhere. #InvestEdu
15.(4) KNOW THE BREAK-EVEN LINE. So, as an investor you need to be aware of buy & sell commission & other hidden charges involved (if it exits). ur portfolio must make well above transaction charges be4 u can claim profit. calculate ur profit in % not in absolute terms #InvestEdu
16. #StockKlass: Let me repeat myself, there is a greater chance of losing more money , if you are timing market. Particularly, in a stock market (like ours) where there are no market-makers to facilitate your quick exit (i.e. Liquidity Risk). #InvestEdu
17.Also, No guarantee that prices would go up when you buy stocks, it is not certain that companies would pay dividends and bonus. Nobody can accurately predict how stock would behave in nearest future. Before you invest in a stock, understand the risks involved. #InvestEdu
18. Also, LACK OF INVESTMENT OBJECTIVES is a big but soft risk, mostly for beginners. this explains d type of investors you are (e.g. are u investing, trading, speculating) & of course d source of funds, expected time of returns, & what u intend to do with ur Profits #InvestEdu
19.LACK OF DEFINED RISK PROFILE. It is important u know ur risk appetite/profile. You shld ascertain how much u can afford to lose in case market turns against ur projections. .eg. how much can u afford to lose in 100k. This wld help u mitigate unnecessary exposures. #InvestEdu
20. LACK OF DEFINED PROFIT/LOSS MARGIN. You must have your clear profit/loss margin. Align the risks with your investment objectives, risk appetite and decide if you can accommodate the risks involved. This is a good advice, please take it serious. #InvestEdu
21. We shall discuss the strategies to prevent this pitfalls listed above. Thank you.
End of thread. If you found this thread(#InvestEdu) useful.
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