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Morris Mpala, MoB Capital Limited
The stock market

THE stock market at the present moment is not for the faint hearted. It has become an institutional game where people invest for power and influence. Where the firm is cash rich, foreign and looking at medium to long term, the emerging markets offer better returns at reasonable risks.

Gone are the days when investors were looking for dividends in the current scenarios but when a company makes a profit they are ploughed back into the business.

Active traders chase both the dividend and share appreciation.

Most investors are looking for share appreciation, which has changed as industry struggle with low production levels due to low capacities.

So for one to cheery pick counters it has become a headache for investors that requires keeping your eyes/ears on the ground and moving with speed and precision of a surgeon.

There is still money to be made on the stock market but one has to be active. Passive investing will have a lot of opportunities cost and you might not grow your money in the manner you will have wished for.

Consult a stockbroker to widen your scope if you want to get started and get in on the action.

Money markets and unit trusts

It is still an area where the returns are still not as rosy as one would want it to be. In a situation where you don’t have any other avenue to park your monies this could be your avenue but the minimum capital required could be $10 000, which is turn off for individuals and SMEs. In these we include unit trusts and TB’s and again the returns are not something we can really smile about. In this category we include call accounts and fixed term deposits as well. Ask your bankers for more information.

Service free banking accounts

These offer long term solutions to saving at fair interest rate of return. These are long term vehicles for savings either for a house, fees and just savings for a rainy day. Never save into an account that accrues charges, its a non starter. Ask your banker on these.

Investing into a business

This is buying unlisted shares of a company through the necessary vehicles governed by the Companies Act. In simple terms it’s investing into a company in anticipation of a return on the invested funds. This could be family business, friends or your own business. You need to follow the rules and regulations that are prescribed for the type of investment you need to do. All you need to do is thorough due diligence on the company or research if you want to do it yourself. Shop around through your contacts.

Investing in your education/upgrading/up skilling

This is another avenue where you equip yourself with superior skills through learning in the hope that it will make you attract job offers that are much better than where you are at the moment or make your business more competitive on the market. It is a wise investment. This also could be an investment into another person that you are dependent on in the belief that their upgrade will also raise your standard of living, for example, education for chidren, sporting facilities for children and sponsoring a footballer now for future returns etc. Audit yourself and you will find answers then seek advice from those in the know.

Life policies/assurance

This is investing for others as it were depending on how you will have defined your policy. This is specific to death on or before your demise you do get a sum paid in accordance with prior arrangements. This safeguards lifestyles to the surviving dependents. Seek the type of life policy or funeral policy that suits you through an assurance agent.

Insurance policies

Am sure the “you may never know what could happen“ is a reminder of what insurance is all about. Insure yourself against many risks that might befall you so that you get restored the levels of which you were before the risk occurred. There are so many policies that you can take and the insurance agent will be able to explain to you in full. This also includes medical insurance, it’s an investment as well.

Pension

The most famous but really misunderstood investment vehicle. You have a personal and the mandated pension scheme one through NSSA. On retirement if you were contributing you will be entitled to some monthly payouts. Talk to your human resources manager or NSSA personnel for full explanations or visit any life assurance company to understand more about pensions. It’s a wise investment that most people don’t get it right.

Assets acquisition

Purchasing of assets that make you generate revenues is the way to go. This is investing in assets that give you a sort of income. Generally tools of trade, houses (not all times), machinery could be considered assets if they aide cash flows. Consult business analysts on this. The current economic scenario requires that you have a little appreciation of how you take care of your financial well being and this requires a lot of consultation and strategic preparations to safeguard those that are economical dependent on you in time of retirement, accidents or death. All the above are meant to increase your passive income so it’s in our best interests to understand these in full and appreciate what they mean.

Make hay while it shines.

IF YOU LIVE IN BYO PLEASE CONSERVE WATER. IF YOU LIVE IN ZIMBABWE PLEASE USE ELECTRICITY SPARINGLY: SOS (SWITCH OFF SWITCHES). IF YOU LIVE ON PLANET EARTH PLEASE PRESERVE THE ENVIRONMENT. IF YOU LIVE IN BYO PLEASE CONSERVE WATER. IF YOU LIVE IN ZIMBABWE PLEASE CONSERVE ELECTRICITY. IF YOU LIVE ON PLANET EARTH PLEASE CONSERVE THE ENVIRONMENT

Send your concise and orecise  questions to: [email protected]

Morris Mpala is the managing director of MoB Capital, a Bulawayo headquartered micro-finance institution with footprint across the country.