6 •
The Lion King
• January - March 2017
Business
HOW TOMAKE GOOD
INVESTMENT DECISIONS
By Olawale Hamed
STEP 1
: LEARN THE BASICS.
Before joining the Investors’ Club,
it is only normal that you learn the
language. You need to understand
basic terminologies and principles
as this will equip you to make
informed decisions. You need to
know the basic investment prod-
ucts available in your chosen sector.
For instance, in the financial world,
investment products include stocks,
bonds, mutual funds, etc. You can
do this by reading, watching invest-
ment programmes or attending
seminars. You should also familiar-
ize yourself with investment related
costs such as brokerage fees and
other commissions.
STEP 2
: SET GOALS.
The next step is to set your goals.
Although the ultimate goal for most
investors is to grow their wealth,
some only wish to preserve their
capital based on certain factors
which may border on age, family
circumstances, religious belief and
risk appetite amongst others.
STEP 3
: DETERMINE YOUR
RISK APPETITE.
How nervous do you get when you
lose money? Before taking on the
investment, you must decide how
much you are prepared to lose if
along the line things do not go 100% as
desired. Risk appetite depends on cer-
tain factors which include age, past
experience, personality and financial
target. Younger people tend to have
higher risk appetite due to their rela-
tive inexperience in financial matters.
Older people may have taken losses
in the past due to bad judgement
and tend to be more careful as they
progress in life.
STEP 4
: DEFINE YOUR
INVESTMENT STRATEGY.
Here you need to identify your total
capital and determine what portion
you wish to invest in high-risk-high-
return projects and what portion you
want to invest in low-risk-low-return
projects. You also need to decide
which sectors you want to invest in.
UBA Provides quite an array of invest-
ment products such as Treasury Bills,
FGN Bonds, Bankers Acceptances/
Commercial Papers, Fixed and Call
deposits amongst others. For further
inquiries please contact
or
STEP 5
: CHOOSE
INVESTMENTS.
After following the steps above, you
need to choose the investments that
will make up your portfolio. If you are
averse to risk, your portfolio should
carry low risk investment options such
as government treasury bills and sov-
ereign bonds. However, if you desire
quick and big profits your portfolio
should carry more of high yielding risky
assets such as loans stocks and equi-
ties. It is essential that we allocate and
diversify our capital portfolio in order
to avoid the risk of losing our entire
capital if the sector in which we have
invested fails.
UBA Treasury or Investor Relations as
your investment advisors are available
to provide you with financial advisory
services on investment options within
the financial sector. Please note that
financial advisory services are pro-
vided along with a disclaimer notice
as the ultimate decision remains that
of the potential investor.
