By Obusitse Kologwe
Stock Direct Market, an educational institution that provides information to investors who want to invest directly to the stock exchange markets, has warned investors to be careful when investing in financial institutions.
The Training Manager of the institution in Botswana, Raymond Jonkers, told a meeting of investors in Francistown last week that most of the times investors do not benefit from their investments because they are passive and lack information on how best reap the rewards from their investments.
He stated that the financial institutions, especially banks, exploit customers as they make a profit way above that of customers.
“Most of these financial institutions are listed at the Johannesburg Security Exchange (JSE) but they will always deny you an opportunity to invest directly at the stock exchange because they make much money out of you,” he remarked.
He went further to state that a lot of investors simply invest and run at a loss due to lack of information of how to invest and when to invest. He also mentioned that as Stock Direct Market, they provide information or the knowledge, which involves programmes and information on line that is always updated on how the JSE is performing.
Jonkers indicated that most of the investors are passive investors rather than active investors.
He added that there is a tendency by most of the investors to put money on the stock brokers or banks and then they do not make a follow up of how they are doing and how they could improve their earnings from those investments.
“As Stock Market Direct, we help with the knowledge of how to invest and when to invest because we always carry out a survey and we subscribe to the JSE, which updates us with information on how the stock markets are performing,” Jonkers revealed.
He indicated that even stock brokers exploit investors because they care much on the commission they make than what really goes to the client as an investor.
He said that there is a tendency by the stock brokers to look at how much money one invests, which then negates those who invest little money, adding that Stock Market Direct is not a broker but a company that serves to equip the investor with the knowledge of dealing with stock markets, particularly the JSE, which is always doing very well.
“The other challenge that we have realized as Stock Market Direct is that people do not have time, therefore that is why we came up with an initiative to always make a survey on how the stock market is performing to be able to update our clients,” he added.
He highlighted that the problem with the stock brokers is that they handle different portfolios whereby they prefer to take care of much of the clients who are investing huge sums of money rather than those with small amounts of funds.
Jonkers advised the investors to look at their investments profile such as the life policies, pension funds, savings accounts, unit trusts and property to analyze if they are making returns on those investments and see how they can strategize to benefit much from the investments.
However, touching on property investment, Jonkers stressed that there are two ways of investing in property, being cash investment or bonds.
“The best method is to invest in property through cash because if you invest through the bond methods the financial institutions are going to exploit you.”
He mentioned that paying property through banks can be costly, looking at the fact that the banks can stretch the years of payment that is making much money out of customers.
Jonkers, however, recommended investors to invest much in property because it appreciates with time, that is, it gains value every time. He further indicated that a lot of investors always make wrong decisions which then contribute to enriching the rich, with the poor continuing to be poor. “Banks do not have money; the money in the banks belongs to you as a customer and investor, therefore they are enriching themselves with your money,” he told the participants.