SPECULATIVE INVESTMENT

WELCOME TO ANOTHER GREAT DAY, MY WIFE'S BIRTHDAY.. WELL LET'S GET BACK TO OUR STUDIES. DO YOU HAVE AN INVESTMENT OBJECTIVE? I MEAN YOU HAVE TO KNOW WHY YOU ARE INVESTING. THERE HAS TO BE A KIND OF TARGET BEFORE YOU SHOOT. THIS WILL ENABLE YOU TO DECIDE BETTER ON THE TYPE OF INVESTMENT TO DO. LETS TAKE A BREAK WITH THE STOCK MARKET REPORT OF YESTERDAY BY CASHCRAFT RESEARCH TEAM.. Market closed today on a very good positive note with more stocks on the gainers side. The banking stocks contributed mostly to the improved market outlook of today with record of highest number of gainers. At the close of market today, 65 gainers, 24 losers and 43 unchanged emerged in the total of 132 securities traded. Other sectors followed in the upward performance of the market. The market behaviours in the recent times has attested to the fact that market may continue to be on the up and down movement for some time before full stability is attained. This volatility will be fuelled more by the activities of speculators who will be on the in and out game in the market. This market may be a money spinner for discerning investors that are armed with the right information, right timing and fund to play the market. Opportunities still abound in the market! This rally may be on for a while because some stocks have come down to ridiculously low prices. All-Share Index rose by 2.813% and Market capitalization gained N154.267 Billion .The winning tact of the markets includes buying into stocks that have strong fundamental with strong potentials of good returns, buying at the right time and for speculators, exiting at the right time. Definitely, the skepticism of the investors about the stability of the market and the potential of the market to give commensurate returns to investors input will soon give way, most especially when the CBN is through with its ongoing banks’ audit. Market is staging a good comeback! GOODNEWS, FOR ALL FORMS OF INVESTORS LOOKING AT IT FROM THE OBJECTIVE THEY MAY HAVE. SO WHAT ARE THESE OBJECTIVES ONE CAN HAVE? YOU CAN BE A SPECULATOR I.E TRADING TYPE OF INVESTOR. AS A SPECULATOR YOUR INTEREST IS ON COMPANIES THAT ARE BELOW THEIR FAIR VALUE AND WHOSE MARKET PRICE IS EXPECTED TO INCREASE WITH TIME. IN THIS CASE, YOU WANT TO BUY TODAY AND WHENEVER THE PRICE MOVES FAVOURABLY ABOVE THE PURCHASE PRICE, YOU SELL. TAKE FOR EXAMPLE, YOU BUY 100,000UNITS OF SKYEBANK AT N5 PER SHARE AND THE PRICE GOES UP TO N8 PER SHARE, YOU SELL AND MAKE A PROFIT OF ABOUT N3 * 100,000 WHICH IS N300,000. THEN YOU MAY REINVEST EVERYTHING OR TAKE YOUR PROFIT AND INVEST YOUR CAPITAL. SPECULATION REQUIRES THAT YOU BUY MORE QUANTITY BECAUSE THE MORE QUANTITY YOU HAVE THE BETTER YOUR CHANCES AND THE HIGHER YOUR RISK THOUGH..HA HA HA. IF I BUY 100,000UNITS AND YOU BUY 1,000,000UNITS, IF I AM MAKING N300,000, YOU ARE MAKING N3,000,000. HOW ABOUT THAT? THIS TYPE OF INVESTOR HAS A HIGHER RISK TOLERANCE THAN THE ONE BUYING FOR KEEPS, WHICH WE WILL TALK ABOUT IN THE NEXT POST. YOU CAN ALSO SPECULATE WITH LAND. YOU LOOK AT A DEVELOPING AREA AND BUY THE LAND, WHEN THE AREA BECOMES MORE POPULAR, THE VALUE OF THE LAND WILL ALSO INCREASE AND YOU CAN SELL. SO SPECULATION IS ABOUT BUYING AND SELLING AT THE RIGHT TIME. THE RIGHT TIME IS NOT ONE WEEK, TWO WEEKS OR ONE MONTH ETC I.E THE TIMING IS NOT FIXED, IT CAN BE ANYTIME.