How can the ordinary woman make it on the stock exchange?

TUNDE OYEDOYIN  

Tunde Oyedoyin is a London-based personal finance coach and founder of Money Intelligence Coaching Academy, a specialist academy of personal finance. He can be reached as follows: +447846089587 (WhatsApp only); E-mail: tu5oyed@gmail.com

As a sequel to last week’s piece, this edition of the column is to illustrate how the ordinary woman or average guy can make it on the stock exchange. Without being a mega investor and coupled with the four points listed last week, it’s possible to hit a home run even after a strikeout.

In order words, both possibilities are always there in the markets. But what we all want is a home run. At the barest minimum, you wouldn’t want to lose your investment even if a home run is out of your reach. This is the how of it.

Hopefully, this can be useful for anyone who fancies investing on the Nigerian Exchange, NGX or elsewhere. If you’ve previously taken a hit, you’ll probably have some takeaways which you can sooner or later put to practice.

As an aside, after reading last week’s column, a retired banker reader asked how long should Pastor Mathew Ashimolowo have waited for? Among others, yours truly said that was a matter for him. Moreover, he should have been watchful. Anyone who has put millions on the table on a market that is cyclical in nature should have been monitoring their investments closely or paid people to do that. Reason being that the market doesn’t nosedive overnight.

Even if that happens, it’s important to remember the market is like the spokes of a bicycle wheel or those of the London Eye. There’s bound to be movement. Here’s the thing, you have to wait for the cycle to turn in your favour.

Back to the ordinary woman or average guy who’s a reader of this column and has, as part of his financial goals for this year, been saving a modest twenty thousand naira per month from January. Let’s say he puts what he’s been reading to practice and withdrew a hundred thousand naira in early July, to have a slice of Fidelity Bank and AccessCorps before the offers closed last month.

Assuming that the little guy has decided to be in the market for the long term and secondly, let’s also assume he didn’t borrow from a micro finance company or any other bank to fund his investment.

Because it’s his own money, he’s not under pressure to pay anyone back. Furthermore, as both banks’ fundamentals are rock solid, this average investor knows he’s not going to be worried for whatever reason if their share prices go South. Even if for the sake of this illustration, the share price went down to let’s say three naira and twenty naira from the offer price of over seven and thirty naira respectively.

Operating from the knowledge base of the four guiding principles, he stays in the game, knowing that like the wheel of the bicycle and that of the London Eye, there’ll be movement in the direction that’ll favour you.

More importantly, this average guy or ordinary woman needs to instruct their stockbroker that if the price of any of these two shares appreciates by perhaps at least ten percent, they should sell half their stock. With that instruction, the little guy can gradually take out their seed capital and still have half of shares to keep. If the share prices don’t appreciate as much or if they stay at that point for the next two years, the ordinary woman can still look forward to dividend payment when those banks declare their results next year.

If no dividends are declared, the little guy still won’t need to worry because he used part of his savings. Here’s the thing, if the results are good, there may be a demand for the shares and that could be a time for this ordinary woman to cash in a bit and still remain in business.

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