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Donald - My Blog
Donald - My Blog


Trading in Stock
Related to country: Canada

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Not long ago I visited one of my very good friends.
He was around to see his family, himself an international staff of an oil company. Knowing that he was interested in investment but in stocks and shares and at the same time engages in the impossible task of monitoring the performance of his stocks. I suggested the idea of investing in mutual funds or better still segregated funds. I took time to explain the benefits of each of these investment vehicles with the attendant peace of mind since there are fund managers to worry about fund performances. His response did not surprise me. what surprised me was his advice that I consider investing in the shares of banks in Nigeria, my home country. I knew better.

The downturn in the global economy and the roller coaster that is stock trading in Wall street and around the world in recent times proved me right. The crash of the Nigerian stock exchange (NSE) did nothing to help my friend. Instead he was wiped clean. He lost the money he invested.

My friend was in Toronto this week and I asked him how his investment in stocks and shares was doing and his answer was obvious, too bad.

The fact is that stock trading can only be done successfully on the floor of the respective stock exchange, be it the Wall street, NYSE, TSX, LSE, NSE etc. Those who monitor stock performance from the comfort of their homes have recently found out that their rate of change is measured in seconds. There lies the difficulty in dumping in the case of downward movement and purchases when it is going up which of course is the natural tendency. A result of panic. In reality, the reverse should be the case. Buy when it is low and sell when it is high. That is how money is made when trading in stocks.

My next blog will be on Mutual Funds.

October 25, 2008 | 6:49 PM Comments  0 comments

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