Dear Nairalanders,

Merry Christmas and A happy New year in Arrears. Welcome to a new business year. I would kick off this year by condoling those of us that got ourselves burnt in current market meltdown. It is quite dishearten that the stockmarket correction or rather the global financial crises has taken a very bad toll on the Nigerian investing public. Any discerning investor should have seen it coming and would have taken precautionary measures. Like every thing nigerian we like to follow the herd without proper research and planning. So long as it is the in thing and can generate high returns overnite with less stress they are in. We tend to forget the principle of gravity. That everything that goes up must i repeat must come down. I must say that everything in life is a risk. Be it business or investing even the very life we a living is a risk becos their is no guarantee that one will wake up the next day. I say this because 70% of people that in invested the stock market during the booming period did so with having any plan what so ever talk less of research the investment they were going into. We as nigerian have 1 single problem and it have has to do with our finances and having a financial plan. I will list out must mistakes we make as investors which in turn affect our personal finances:

1. Procrastination about financial decisions.
2. Having goals that are general and unrealistic.
3. Not having a plan.
4. Going uninsured against death, disability and liability.
5. Ignoring the cost of inflation (A situation where prices rise to keep up with increased cost of production and results in the decrease in the
purchasing power of money).
6. Wanting to do it yourself to saving a few bucks.
7. Speculating vs. Investing.
8. Be over weighted in the current fad
9. Having too many idle and illiquid assets. (Cash, CD’s and Real Estate)
10. Demanding immediate results.
11. Wanting everything guaranteed.
12. Making decisions based on emotions.
13. Not understanding the concept of asset allocation.
14. Being overly influenced by family and friends
15. Lack of spending, saving and investing discipline.
16. Thinking any person, firm or magazine knows how any investment is going, when and by how much.
17. Wanting something for nothing.

Why i have listed these items is becos must nigerians don't have a personal financial plan.Why must people got their fingers burnt in the recent financial market meltdown was becos they invested funds meant for short term goals in a long term market. Some even went the extra mile to borrow short term funds from banks to invest in the stock market and got themselves into troubled waters. I will have to stop here for now. I will love to hear from fellows nigerians on this issue.

Thank you for the wonderful post