The price Nigerians Pay for being patient

When the tyrant General Sani Abacha died, no body not even of his supreme ruling council lifted an eye brow talk less of calling for the investigation into circumstances surrounding his death. Before him, there were many uninvestigated deaths and after him there have been more. The most recent of a state sponsored killing is that of the Boko Haram. The government labelled them militants and anti western culture. Simple civil law states that everyone is innocent until proven guilty, so what led to the assasination of the leader of the Boko Haram group, his family members, his mother and most especially his innocent children. I think if Yaradua wants to die, he shouldn't be going to his grave with human heads. I think this image calls for the immediate resignation of the President. Check out the interview just before he was assassinated on sahara reporters

Evaluating your investment

There are many investment strategies that can be used in the capital market but there are certain characteristics to look for in any plan. Before developing a strategy for investing, you must have a set of critreria for judging if it is a good plan or not. The following nine criteria can be used to judge if it is a good plan or not.
　
Let gains run their course but cuts losses
This is a necessary element for any god plan of investing, especially the part of letting gains run their to their full potential. as well as a portfolio is well diversified, you can make the mistake of holding on to your losers, but you should not make the mistake of prematurely cashing on your winners. since we expect our gains over long periods to exceed 100% of our initial investment, the amount of damage that could be done for cutting our winning stocks far surpasses the damage we can get for failing to cut our losses.
A lot has been said on when to cut losses. some analysts believe losses should be cut at 10% while others feel 5% is preferable. But these two positions are rather too short and does not allow a good stock enough room for normal day to day fluctuation. Also at 5-10%, it is easy to get bumped out of a sock only to have it recover and begin soaring again without you being on board.

Aim never to lose more than 5% of your total portfolio on a single stock position
If you aim not to lose more than 5% of your cash on any one position, it will take a long string of uniterrupted losses in order to seriously deplete your portfolio capital. There is nothing magical about the number 5 but the point is that you should greatly minimise your losses so that it does not affect your portfolio. Even in bears, it is improbable that all of your positions would drop to your sell point.

Gradual entry into major positions as long as the positions remain profitable
it is inevitable that any system which attempts to let gains run will eventually build some large positions in a few stocks as the stocks grow in value. this is a good way to develop a large position. Also it is OK to build a position by adding to the position as it advances in value. In fact most professional add to their stock holding as the price moves in their favour.In this way, they maximise the the potential reward for holding a particular stock or basket of stocks. However, some approach makes an investor to plunge a large amount of his capital into and out of the market all at one time. this type of approach must be avoided at all cost. it is risky to enter into any market all at once because it maximises your ability to lose a lot of money in a hurry. One poor timing decision can result in a loss of a large percentage of your capital and those depletion of your capital really hurts your portfolio.


Minimal chance of a large loss from any one position
This is an adjunct to #2, as the gradual entry into a position is a means for minimising the chance of loss from a single bad decision. Again it cannot be over emphasised that massive loss of capital should be avoided at all cost. ideally, no stock should form more than 25% of your total portfolio value.
Clear, predetermmined criteria for initiating, adding to, or liquidating a position
In the heat of battle when you are dealing with your hard earned money, the instruction from your system must be as clear as crystal. if not you'll find yourself making judgement calls that relieve short-termstress, and yet are poor long term decisions.Precise and unambiguous signals and marching orders are the best way to head off the the effects of euphoria and fear. You may still feel these emotions but as long as your system is sound and you adhere to it fastiduously, everything would turn out well. Set exit and entry positions early in the game
Sell a stock once it begins to underperform
While we want to make sure we have a means of riding a stock's trend for as long as it can go, when it becomes clear that the trend is beginning to profoundly weaken or even reverse, we need to have a system which allows for selling the stoclk we can redeploy capital to greener pastures
　
Maximum Naira invested in biggest winners
If a strategy allowsus to build a large position in an issue that is lagging or even losing money for us, there is nothing seriously wrong with that strategy. A successful strategy has to ensure that ourbiggest investments are in our best stoccks not in the worst. Restructure your portfolio as often as the market allows especially during bull markets

Minimum naira invested in losers/ underperformers
This is the converse of#7. it is interesting to note that the only way you can accomplish having too much invested in a lose is to either plunge into it all at once and fail to cut your losses or add to a losing position once it is established as a loser

Not time consuming to maintain
This is important because tim is your most valuable asset after your mind and probably is short supply as well
　

Patience as a virtue in investing

Most successful market beating investing strategies tell you to buy the right company, pay the right price and wait for the market to realise your foresight.
These strategies in themselves are great- take for instance the first that says you should buy the right companies- Isn't this the obective of every investor. the second also advises that you pay the right price- how do you establish the right price?
With the third, there is a little problem while you are waiting, it is your maoney that is at risk in the period.

From the time you make your purchase to the time your investments workout; the market would have its own ideas as to how much your companies are worth. Obviously, there would be times it doesn't agree with you.


It has been said that patience is a virtue in investing. However when you are looking at a sharp drop in price so after buying a stock, it is tough to be patient without having irregular heartbeats. Fortunately, there is a way of reducing all the anxiety by insisting on being paid while you wait. this is by buying companies that pay their owners well via dividends and look most likely to continue.This way even if it takes a while for the market to catch up with your thinking, atleast you are getting some cash for your efforts. However, there is a caveat here, to beat the market over the long haul, those businesses must be backed up with solid businesses and staying power. if a company has an attractive yield but a weak business, the dividends would surely cease. Therefore, the business must pay attention to the business behind the stockin order to be in a position to know when the dividend is at a risk.
In spite of this, patience is needed throughout the cycle of any investment ie at the entry(buying), holding and sale(exit). Lets now consider the role of patience in these scenarios.

Waiting for Entry
The investment process usually starts with determining an acceptable entry position for an identified stock. With this in mind, you are expected to wait for the price to reach your target entry point. Unfortunately, rather than moving towards the price, the stock hovers far above your stated position. This ordinarily pushes you to panic. and buy at a price higher than what your strategy dictates. Having done your homework and developed a plan,emotions can undermine your capacity to achieve your long term goals, hence the need to focus on the long term objective. It has been proven that impatient investors who violate their disciplined plan usually ended down the path of ruination.
Following a predetrmined strategy keeps the emotional side of investing at bay. Waiting for the right entry point is the essential characteristic of every successful investor.


Searching for winning positions
Patience in investing is similar to that experienced on the high seas while fishing. There are many fish in the sea and it is not essential to catch every fish that comes your net's way.It is important to note that there are many investment oppurtunities in the market, so the difficulty is not so much in finding oppurtunities but in making sure they fit into your sset plan.
The fact is that catching those few that meet your criteria is the mostimportant objective. It is vital that you concern yourself with good entry points while making sure that you have defined exit points. Having done this, even if the stock deviates from your set plan and you are sure for the underlying reasons for buying, dont panic, BE
PATIENT.

Though on the contrary, there are times that inspite of your faithfulness and patience, the price of your stock barely moves. With this it is important to re-examine your analysis of the stock. In many cases, this may be as a result of the market's interest in other sectors at the time being and this also buttresses the need for patience.



By and large, most of investing is psychological; therefore exhibiting patience at entry points and having patience

while an investment position develops are integral parts to successful investing. Moreso, investing in stocks with

good and consistent dividend pay-out history and being rewarded with numerous dividend while you wait is a plus in

this wise. Therefore, the key to success is to find the right company at the right price. in this case, the right

companies are those that have a strong underlying business; have a history of paying their owners well; and trade

at a decent price when compared to their underlying worth.