In our second installment of FinInsight Zambia’s journey on the Lusaka Securities and Exchange, we thought it would be great to discuss our relationship with the stock broker that we chose to help us build our portfolio of companies on the stock exchange. As indicated in an earlier entry, stockbrokers are professionals who are trained to help you with buying and selling shares. Although our story begins with us buying shares from four select premier companies, we had to engage with our broker to give us some perspective on the companies we were investing in.
The value of a good stock broker cannot be understated. We have ours on speed dial because in the age of information, when company news falls on our desk be it through an email or an entry on a website or an article in the local newspaper, our broker is expected to be on top of company news. That’s their job. However, gifted with the art of financial analysis, our engagements with our broker are more astute. For example, our initial email exchange included questions such as how was the company’s performance over the last 5 years?, have they changed leadership recently at board level and corporate management level?, what have their sales been like over the last 3 years?, has the company signed any interest contracts of late? All of these questions allow us to paint a picture of how this company is performing. It’s a beautiful conversation.
Hence we are proud to be associated with Stock brokers Zambia. They are our official buffer between us and LuSE. They are licensed to do this and have the requisite certifications granted to them by the Securities and Exchange Commission. In short, they know their job. However, that doesnot take away the responsibility of you the investor of reading and understanding about how that company is performing. Many a time, investors in Zambia would bury their investment in a company the hope that even without due diligence, the company will create value. It does not work like that. Stock markets from all over the world will advise you that, like farming, investing in the stock market has high risk and potentially high rewards. Therefore, were commend the FinInsight approach to owning shares. Make it a personal journey.Make it about the long game. Do your homework about a company (FinancialInsightZambia.com is building a repository and is currently in year two of the analysis story of all LuSE listed companies. Just go sector by sector). Keep your eye on the ball.Most important of all, be friends with your broker.