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What African-Australian professionals need to know about stock market investment

by  Africa Media Australia


At the beginning of every new year most of us adopt many resolutions. Some of these resolutions may be about improving our health, our relationships, our spiritual life, our finance or any other important area of our existence.

For savvy African-Australian professionals wealth creation and financial freedom is always part of the list of resolutions for any new year. However, adopting a resolution is one thing and getting things done is another. Creating wealth requires a lot of knowledge, hard work and commitment and, above all, good winning habits. Our habits form the fabric of our lives, our future and destiny. If you want to be financially free or simply financially comfortable, you need to develop and maintain winning habits that will help you to produce income, save enough of it and invest it for future gain. As the saying goes, it is not how much you earn, but how much you keep that will determine your wealth.


while saving money is important for wealth creation, what is even more important is investing the money you save wisely to multiply it and create abundance. There are many ways to invest money and investing some of your money in the stock market should be on your list, if it hasn’t been yet. In most western countries, Australia included, many people are making real money, and quite a lot of it, in the stock market every day and there is no reason why you shouldn’t do the same.

In my circle of African-Australian friends, not many are aware of how stock market investment works and not many trade shares. I suspect this situation can be generalised. For over 20 years since I have lived in Australia, I have not heard much, even in casual conversations or seen anything in the media or social media platforms about African-Australians successfully investing in the stock market. This is understandable to some extent as, historically, many of us have come from countries in Africa where we don’t hear much about the stock market, although things have substantially changed over recent times, at least for some countries.

Maybe you may have thought about investing in stock market, but you were not sure what to do or you have remained sceptical, because you heard horror stories from others about large losses. Perhaps you believe that you need to know a lot about stock market investment or spend a great deal of time in order for you to be a successful investor.  Don’t let these thoughts and feelings stop you. Here are three things that stock market experts recommend, which you may consider if you are thinking of starting investing in stocks.

Don’t be afraid of the risks, where there is risk, there is reward as well

There are not many investment options that rival the stock market. People worry about its risks and prefer to immobilise their money in savings accounts or buy investment properties. Statistics indicate that over time, the stock market is quite a stable and profitable investment vehicle. In America, since 1940 the stock market has returned approximately 7% (post-inflation) every year, compared to 1.5% post-inflation return for real estate.

In Australia property investment may be more profitable than in the US, but there is no reason why you shouldn’t invest some of your money in the stock market and make sure you don’t have all of your eggs in one basket. The property boom can go bust anytime, especially as the COVID crisis can be expected to reduce or at least slow migration, which will ultimately affect property prices negatively  in mid to long-term perspective.

Stock market investment is for the long-term. You can lose nearly all of your money in one year or one week, but if you invest for the long haul (ten years or more) then your total average returns each year may be quite handsome.  A lot of individual investors chose stock market investment for their retirement, rather than to gain money to buy a property or other modern conveniences. But if you learn the game well and invest yourself in it, you can make get great gains in relatively short periods of time.



Australian stock exchange in Melbourne



Start Small, but be consistent

Nowadays there are many app-based investing platforms that allow you to invest even little sums of money like $10 or less. The secret is in making regular investments, no matter how small they are and overtime you could end up building a substantial portfolio. Regular investment gives you the benefits of a strategy known as  dollar-cost averaging. The fluctuation of stock prices means that your regular monthly purchase of shares of a specific stock will be bought at different prices each time. When the stock price is high you will buy fewer shares and when the stock low you will buy more for the same price. Over a long period of time your average price per share will decrease, and you’ll see a higher return on your investment. Experts recommend this strategy to beginning investors as a way to build real wealth. All that is required is simply for you to make the commitment to start and the determination to keep investing like clockwork every month over time.

If time is a problem for you, chose index funds

If you don’t have a lot of time in your hands to always follow what is happening with the stock you may choose to invest in index funds. Index funds are mutual funds designed to mirror a major stock market index (like the Dow Jones Industrial Average or the S&P 500). Historically, these funds have always increased over time. In the US the Dow index has increased more than 10 times since 1990. In Australian the ASX has returned an average of over 13% per year.

It is relatively easy to invest through Index fund. All you need to do is buy shares, and you hold them for at least 5 years and sit back and wait for your money to grow. Whilst index fund investment is not risk free, but the risk is substantially diminished as a result of the fund representing multiple stock. If one stock price has depreciated, the loss is offset by another stock price increase within the fund and this gives you the benefits of long-term gains with minimal risk.

If you want to give stock market investment a try, you will need to dedicate sometime to reading, studying and understanding the fundamentals. There is a great deal of resources out there that can help you learn and gradually increase your knowledge in the field. However, the best way to learn is to start investing and perhaps you may decide to open a brokerage account soon and put a few dollars in there and start the journey.


Clyde S. Sharady

Entrepreneur | Communicator | Author



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