The Nigerian stock market has a funny way of teaching humility. You can research a company, buy it confidently and watch it fall the next morning. Meanwhile, the stock you dismissed six months ago is suddenly up 40%.
The goal is not to eliminate every mistake. It is to avoid the expensive ones.
1. Buying because someone said buy
A friend says the stock will move. You buy first and ask what the company does later. Reverse the order. Research first.
2. Chasing a stock after it has exploded
A stock rises 30%, people start talking, and suddenly everyone believes it can only go up. Momentum is not a valuation model.
3. Assuming a low-priced stock is cheap
A ₦5 stock can be more expensive than a ₦500 stock. Share price alone tells you almost nothing. Look at market cap, earnings and valuation.
4. Chasing dividend yield
A huge yield looks attractive. Sometimes it is. Sometimes the market expects the dividend to fall. Always ask why the yield is high.
5. Ignoring financial statements
If you buy a company without reading its financial results, you are taking avoidable risk. You do not need to become an accountant, but you should understand revenue, profit, EPS, debt and cash flow.
6. Putting everything into one stock
Even the best thesis can be wrong. Diversification protects you from being spectacularly wrong about one company.
7. Treating a loss as proof you were wrong
A stock falling does not automatically mean your thesis is wrong. The business may be fine, or it may have deteriorated. Investigate.
8. Treating a profit as proof you were right
A good outcome does not always mean a good process. Randomness can reward bad decisions for a while.
9. Checking the market constantly
If you are investing for five years, checking every six minutes probably does not improve the outcome. It may increase your blood pressure.
10. Not keeping records
Keep your transaction history, statements and investment records. Know what you bought, when, at what price, why, what you expected and what actually happened.
Most investing mistakes come from emotion, urgency and incomplete information. Slow down, research, compare, write down your reasoning and then decide.
That is the kind of investing process Moniwise is designed to support.