There’s an old saying in the markets: if you doubt it, don’t buy it. That rings especially true in Nigeria’s stock market. Before you ever put money into a company’s shares, you need to know who’s behind it. If you trust their vision, maybe you’ve found a slice of the pie worth holding. If not, channel your inner Usain Bolt—run.
This year, 2025, has been a whirlwind for investors on the Nigerian Exchange (NGX). Some stocks have delivered massive returns, far beyond what most analysts projected. Anyone who hasn’t pulled at least 36% gains this year probably picked the wrong companies. That might sound blunt, but markets reward precision and punish guesswork.
Still, it’s not too late. The market’s not done serving meals, even if the main course has been gobbled up. The rally caught many off guard, flipping doubters into believers, and for those just arriving, the party’s still warm.
1. Stop Parking Your Cash in Idle Accounts
Let’s be real: leaving large sums to sit quietly in the bank is a slow leak on your financial ambitions. People who understand money know that saving comes with its own cost. Inflation eats, bank charges nibble, and in the end, your naira shrinks.
So, if you’ve been watching from the sidelines, now’s the time to recognize stocks as more than just paper slips. They’re vehicles for wealth—sometimes risky, yes, but often more rewarding than fixed income instruments. But remember, not all stocks deserve a spot in your portfolio, and clinging to a single company’s shares is a rookie mistake.
2. Don’t Ask the Wrong Questions
A lot of Nigerian investors ask, “Where can I put N1 million to get good returns?” It’s a fair question, but it’s also incomplete. The better question is: How much risk am I willing to shoulder, and how quickly do I want returns?
The truth? If you don’t invest correctly, you could lose everything. Think of Heritage Bank—imagine if its shares had been listed. Investors would have been wiped out when it collapsed. Union Bank, once listed, failed regulatory requirements and was forced out of the market. Even GlaxoSmithKline pulled out, leaving some investors stranded.
3. Don’t Panic-Sell When the Tide Turns
Take MTN Nigeria as an example. When earnings dipped, many investors bolted, pushing the stock down to the N200 range. Fast forward six months, and the same stock now trades above N430. Those who sold in panic are licking their wounds.
The stock market isn’t a place where you buy and sleep soundly forever. It demands vigilance. Trading apps from local brokers have made it easier than ever to monitor daily movements—use them.
4. Don’t Chase Stability If You Can’t Afford It
Here’s a common trap: new investors, with relatively small capital, chasing stocks like Airtel Africa. At over N2,300 per share, Airtel rarely moves, but when it does, it swings big. Unless you’re buying in millions—or aiming for a board seat—you’ll tie up your capital in a stagnant giant.
For smaller investors, liquidity matters. You want stocks that actually move, where momentum offers opportunities. Volatility isn’t a bug; it’s the very feature that delivers capital gains.
5. Don’t Ignore Company Fundamentals
Let’s cut through the noise. Stocks move on sentiment, but fundamentals decide longevity. Before you buy into a company, ask:
- Is it profitable?
- Does it pay dividends (interim or final)?
- How strong is its leadership, and is there key man risk?
Take GTCO, for instance. It’s consistently profitable, pays dividends, and carries relatively low leadership drama. Compare that to First Holdco, where internal infighting has slowed progress. Fundamentals aren’t the whole story, but they’re a compass in stormy seas.
6. Don’t Overestimate Your Strength
New investors often get burnt by trying to play in the big leagues too quickly. With N100,000, buying Dangote Cement may not make sense. With N1 million, does BUA Foods look better? Maybe. The answer depends on your target.
Think of the market as a jungle. Antelopes don’t challenge lions head-on. As a retail investor, avoid “lion stocks” that swallow your capital without movement. Instead, hunt where opportunities are smaller but sharper.
Wema Bank is a good example. A few months ago, its rights issue was priced at N10.45. Today, the share trades above N23. Investors who spotted the trend doubled their money—no fancy math required. Timing and discipline did the trick.
7. Don’t Trade in the Dark
The market isn’t a guessing game; it’s a chessboard. Prices rise and fall for reasons—regulatory delays, dividend announcements, earnings surprises, even whispers about the Central Bank’s stance.
Just last week, Tier-1 banks dragged the index down because investors feared interim dividends might be blocked. That wasn’t random. It was a calculated retreat ahead of potential bad news. Sophisticated investors think this way—and if you want to win, you need to think like them.
Final Word: Avoid Rookie Mistakes, Play the Long Game
Stock investing is about more than numbers. It’s about psychology, timing, and yes, sometimes a bit of luck. Don’t over-romanticize any company. Don’t ignore fundamentals. And please, don’t bet money you can’t afford to lose.
The Nigerian market has proven to be a money-making machine in 2025, but it rewards caution as much as courage. You don’t need a finance degree to succeed—you just need curiosity, discipline, and a willingness to learn from others’ mistakes. So, the next time you feel the urge to chase a hot tip or cling stubbornly to a sinking stock, pause and ask yourself: Am I investing smart, or am I investing wrongfully?
