Investment Strategy & Portfolio
Understand why value investing (pioneered by Benjamin Graham, practised by Buffett): price ≠ value.
10
Lessons in this module
Value investing
Understand why value investing (pioneered by Benjamin Graham, practised by Buffett): price ≠ value.
Growth investing
Understand why expectations risk: growth stocks price in ambitious futures.
Index investing
Understand why arithmetic of active vs passive: all investors collectively hold the market.
Naira-cost averaging
Understand why nCA's psychological value: investing decisions are pre-committed and automatic.
Sector investing in Nigeria
Understand why nigerian banking stocks appeal: (1) dividend yield — banks like Zenith, GTBank, Access pay significant dividends (5-10% yield), (2) interest rate sensitivity — high CBN rates widen bank margins, (3) economic utility — banking services are needed in all conditions.
Asset allocation
Understand why the three allocation drivers: (1) Time horizon — longer = more equities acceptable (time absorbs volatility), (2) Risk tolerance — emotional and financial capacity to handle decline without selling, (3) Goals — what return is needed? If 8% T-bills meet your goal, why take equity risk? These three together determine the right mix.
Portfolio for a 15-year-old
Understand why the equity premium: stocks historically outperform bonds, T-bills, and cash over long periods — by a significant margin.
Nigerian investor context
Understand why digital investment platforms have transformed Nigerian access to global markets.
Portfolio rebalancing
Understand why rebalancing serves two functions: (1) risk control — without rebalancing, bull markets push allocations to dangerous stock-heavy concentrations; (2) systematic value investing — selling the asset class that grew (relatively expensive) to buy the one that underperformed (relatively cheap) is disciplined counter-cyclical investing.
Starting with 5000 in local currency
Understand why time dominates initial amount: (1.
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