In­vest­ment op­tions in Zim­babwe

Chronicle (Zimbabwe) - - Business Chronicle - Mor­ris Mpala

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 mpalam­or­ris@gmail.com

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

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