We Aren't Watches, So We Shouldn't Be Timing Things
Many economists are finally starting to use the "recession" word to describe the Nigerian stock market. Almost daily, someone is calling the bottom of the market. And many investors are sitting on the sidelines with their money until this magical moment is actually reached.
Just one problem: We won't know when the bottom of the market happens until it has already happened. By then, prices will be on the upswing, and the opportunities to buy at fire sale prices will be gone. Kind of like what's happening with the housing market. Many buyers out there are saying that they are waiting to purchase until prices come down more. What if they have already come down as far as they are going to go? We won't know for certain where the bottom is until it is months behind us.
If, right now, you have the opportunity to buy a great company at a ridiculously low price, you should be taking advantage of it. Trying to save that extra few naira a share by trying to perfectly time the bottom doesn't make sense in the long run.
Take UBA, for example. It is currently around N28/share. If you buy now and sell at N40/share when the market rebounds, you will have a return of approximately 43 percent. If you wait for it to drop to N26/share and sell at N40/share, your return would be 53 percent instead of 43 percent. Great! That is a 10 percent increase in your rate of return. But what if UBA never gets cheaper than N28/share? What if that is the cheapest it will trade for during this "recession"? Then you will have to buy it at N30/share. Or maybe N32/ share. And then your returns will be only 33 percent or 25 percent
Instead of trying to time the bottom, you should be buying the stocks of great companies now. Opportunities to buy them at current prices don't come along very often. Take advantage of it.
Enjoy!
www.naijamarketsquare.com

Seems this recession is worldwide!! The Bears seem to be ruling supreme the problem now is should one sell in fear of the stocks going further or wait and hope it goes up somehow

wait and hope it goes up