After reading the stories on this page titled “Investing in stocks, consider…” and “Explore these collective investment schemes”, a reader from Enugu sent an email requesting advice on what to invest in.
He wrote: “Dear Mgboji, I have been reading your personal finance stories in TheNiche on Sunday. Reading your column has taught me a lot of personal finance lessons which I cannot find in textbooks.
“I am confused over what to invest my money in. After my investment in shares got eroded with the stock market crash, I have been finding it difficult to buy shares until I read your article. Please advise me on where to put my money.”
We wrote back that investment decision must factor in circumstances in the immediate term and cash needs.
Without arrogating expert knowledge in investment, we think that it is important to realise that what to invest in depends on the investor’s stage in life.
It was this important factor that the Managing Director and Chief Executive Officer of the National Association of Securities Dealers (NASD), Bola Ajomale, stressed in an exclusive interview last week.
Ajomale, a financial expert, has worked in blue-chip companies including Ernst & Young, Augusto & Co., Canada Pension Plan and several others abroad.
Drawing from all his working life in the financial market, he said: “If you are a 24-years-old, I advise you buy equities. If you are 35 to 40 years old, buy a house. If you are 50 years old, invest in your children.
“At 60 years old, I will say go and invest in bonds. It all depends on the stage you are in life.
“I feel horrified when I see investment advisers in the country tell somebody to buy X Y Z shares. Life is not all about returns. Life is about stability and planning.
“If your daughter is going to marry in about six months’ time and you need to put money aside, is it reasonable to buy shares? No. It is a time to put money in a fixed deposit in a stable bank. You need the money when you need it.
“Or your son is going to a university abroad in six months’ time; is it a time to discover equities with high yield dividends? No. It is a time to invest in dollars. Go and buy dollars because you will need it shortly.
Ajomale stressed the importance of private engagement with potential investors for professional advice, adding that “one’s demands over the next couple of periods determine one’s cash needs and what to invest in.”
