In issue of shares, don’t follow the crowd





 If you want to make money investing in shares, you must not follow the crowd. When the stock market was booming and almost every company was selling shares, investment in shares became popular. Every Tom, Dick and Harry started buying shares.

Many people bought shares not because they had interest or knowledge about shares, but because that was what everybody was doing. Even when there were no offers from companies with track record of performance, people still bought shares- from any company especially through private placement, they invested in this Fund, that Fund. “Just buy”, was the order of the day.

Some capital market operators took advantage of this craze by introducing ambiguous investment scheme with the promise of mouth-watering returns, and people bought into them gullibly. More than five years after making such investments, they are now complaining. “I have invested in XYZ Fund since 2007, I have not heard anything from them.” That is what happens when you follow the crowd.

Interest and passion are critical to success in any life endeavour. When you don’t have interest in or passion for something, the only reason you will likely do that thing is because others are doing it. The truth however is that you will most likely not be committed to that thing. You will most likely not follow up on it, nurture it to produce results. You would be easily discouraged and give up. That is what happened to many investors especially the retail investors around the country.

They followed the crowd, and invested in something they did not have passion for hence they did not follow up. I bought shares in company x during its public offer in 2006, I have not heard from then since”. If you did not hear from the company, why didn’t you make effort to find out about it?

You have newspapers, television, radio and the internet to source information. The company you invested your hard earned money did not contact you for more than five years, and you did not make effort to contact it or seek information about it.

It is because you did not buy the shares out of passion and interest. You invested because others invested. Maybe your share certificate and dividend had been posted to the wrong address, maybe they are been intercepted by fraudsters, but because you did not follow-up, you would not know, the company also may not know. Yet your investment and dividend are lying fallow.

Profitable investment in shares requires consistent follow-up and monitoring. It requires you to know what you are buying and why you are buying it. It requires buying or selling based on specific goals and purposes. But the commitment required to do this comes from passion and interest.




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