Basics of Investing

Investing and Saving go hand in hand though they are not the same thing. Saving is very important as it leads to capital formation i.e. it creates a stock of money that is available to finance long term business growth as well as other projects such as infrastructure development. Investment on the other hand leads to capital growth and when done well will result in your wealth growing i.e. investing is making your money work for you. To underscore the difference between saving and investing, let me use the Biblical story of the Talents. Since I am not going to repeat the parable here, those who may want to read the parable can follow the link below:

https://en.wikipedia.org/wiki/Parable_of_the_talents_or_minas

So the first and second servants who had received 5 and 2 talents respectively had put their talents to work and managed to double the value entrusted to them by their Master - THAT'S INVESTMENT. The third servant had simply hidden his talent and it had not grown; he presented it to his master upon his return. The third servant had simply SAVED! The first and second servants were rewarded by their master while the third servant got punished. If you invest wisely, you get more! If you save, you maintain value in nominal terms but due to other things like inflation and 'opportunity cost' you may actually end up losing. Below is a long piece on some of the things you need to know as an aspiring investor...happy reading!

Spend, Save or Invest?

Whether you are a student, young professional or nearing retirement; single, married or a parent, you have goals in life. Your goals could be long term for instance acquiring a property, planning for the kids' university fees or living comfortably after retirement. Or they could be short term goals like going on annual holiday with your family. Regardless of what your goals are, if you want to achieve them you need to plan. And you need to start doing that now.

You must decide what you do with your money.There are three options; you could spend all of it now, save it for the future or invest it in certain assets. Spending all your current income is not really the wisest thing to do because you will not have enough money to fund your plans and you wont be sufficiently prepared for the rainy day i.e. that day when your income sources will run dry. If you save a part of your income then you will have something for the future but your wealth could actually be eroded by inflation if it is not properly invested. 

So starting today, make a commitment to save and invest a portion of your income. Decide how much of your monthly income are you going to spend, save or invest. No matter how small, whats important is to start saving and investing religiously and 20 years from today you will realise what a wise decision that was. 

Start saving and turn your goals into reality! In our next post we discuss the basics of investing.

#DataMustFall

Now this has become topical. The operators and government, it seems connived to fleece us of our hard-earned cash. Now that the backlash is coming, its now all blame game.

Bond Notes - finding joy in a difficult place....

So the coming of the Bond Note is what the ZSE wanted to reverse its downward trend? This morning, the mainstream industrial index closed firmer at 105.21 points having fell to below 98 points just a couple of weeks ago. This isn't surprising though as it clearly shows that local investors are flocking to stocks to hedge against currency risk.
We just LOVE it when the market brings joy to investors, you know. It makes good reading and helps reduce stress levels on fund managers. But considering the cause, we are not sure whether to celebrate or cry.

Goodbye 2015

It was a long, difficulty year for most Zimbabweans, this 2015. And it's now coming to an end.

Definitely, the Zimbabwe Stock Exchange (ZSE) had its worst year since dollarisation, probably its worst year ever. The market experienced numerous challenges not least the bearish sentiment which saw market capitalisation fall to just over $3 billion with the mainstream industrial index down from 162.79 on 31 December 2014 to 114.17 on 29 December 2015. Considering that the previous year the ZSE had lost 19.46%, its clear the equities market has not brought much joy to investors over the past 24 months.

ZSE: An End or a Beginning?

The Zimbabwe Stock Exchange (ZSE) has had a tumultuous history, moreso in the past 10 years. From the psuedo returns of the hyper-inflationery era which saw the exchange post stratospheric returns to the numerous de-listings, low turnovers and investor apathy of 2014 and 2015, the question arises; Are we seeing the end of the ZSE?

Time we make the 99 year lease REALLY bankable

News in the state media this week suggested that the government and the Bankers Association of Zimbabwe (BAZ) have finally agreed on provisions that will make the 99 Year Leases bankable. If that is true, then that would be a giant step in the positive direction. If 99 Year Leases become bankable i.e. acceptable as security against bank loans, that would mean that resettled farmers can use their land to access funding from private institutions to support their operations. All good.