As a battle hardened investor who has survived two major recessions and several minor ones,I can assure you that stocks still outpoerform real estate in the long term. So dont give up on stocks,just get smarter about how you go about investing in stocks. And here are a few lessons about how to go about doing that.

Do not diversify: I have always said that diversification is for lazy people and it will not reward you,nor will it protect you from the slide. You are better off keeping a few stocks(for me max 5) that you know like the back of your hand,stocks which you can monitor like a hawk around the clock. and when I say monitor I mean reading news related to it,listening to earnings conference calls,monitoring stocks bulletin boards. what you will realise after doing this is that you will always be a step ahead of the market,coz the market is not that efficient.

Do not be afraid to bet against the market: Everyone knows Warren Buffett's 'be fearful when others are greedy and be greedy when others are fealful',but how many people acctually put it to practice? When you see mama mboga day trading,know that's its time to get out,on the other hand when you see the media beating the recession story to death,then its time to jump back into the market.

Prioritize wealth preservation: Most people are very good at wealth creation,but they are very poor at wealth preservation thus rendering their effort useless. Please use stop loss wwherever you can. Absent stop loss,then know when to take profits. Blindly buying and holding onto a stock when there are other better opportunities is simply irrational,which brings me to my last point.

Buy the best priced stock,not the best company: A lot of us focus on the company more than the fair value of the company's stock. For example,Exxon Mobil may be the best oil and gas company but Petrobras stocks may be better valued in comparison to Exxon. and since our priority is to increase the value of our equity,we need to focus on stock valuation rather than company valuation.

Agree with you Ug and Ghana. One thing to watch out for in Ug,is at this rate,I'm pretty sure it'll have political complications within the next 3 yrs.

www.mjengakenya.blogspot.com

Mzee TB / Mainat,

I rarely respond to any contribution in my post but since I respect both of you on this forum,let me clarify some things. Also all my articles are my true life experiences

I am a core stock investor in 5 African countries (Nigeria,Kenya,South Africa,Ghana and botswana) and also five off shore countries (Hongkong,US,Australia,Thailand,Singapore) and I do this to build by next egg to retire from rat race (paid employment) in few years to come.

Stock investment is my No1 but it is extremely perfect to back up with Real Estate. The most difficult thing with real estate especially in Africa is the fear of being conned especially if you are overseas,also the huge amount of Capital involved. But I have discovered that for a salary earner like me I can still decipher a reliable way to start small without being conned even without having huge capital.

To avoid being conned you have to see what you want to buy (by travelling there) and you must conduct due diligence to establish the authenticity of the land or house to buy. More importantly buy a house or serviced plot from a planned estate and don't cut corners (pay the right legal fees / commission) and follow due process. EXAMPLES
CASE 1 GHANA
I came across this planned estate the first of its kind in West Africa called Sun City marketted by Falconcrest Investment Lts,Accra Ghana. A planned city of 4000 Plots (80ft X 100ft) going for US$6,000 then (2007) and you only need to make 20% installment and spread the balance over 36 Months.

I travelled there conducted my search,subscribed to it by paying the deposit. I was able to pay the balance installmentally 10 Months after in August 2008.

The going price of the land is US$15,000 now and you must make 30% down payment and pay the balance over 12 Months rather than 36 Months.

So if I want to sell my land now,you know how much I can realise.

Suncity Website : - www.falconcrestghana.com

STOP PRESS
Latest feed back is that the going price of Suncity managed by Falcon Crest Ghana
is a whooping USD$35,000, 50% down payment and balance can be spread over 12 months.


CASE 2 UGANDA

After due deligence I got to know Jomaiyi properties :-

www. jomayi.co.ug



Again their have serviced plots available and negotiable installmental payment.
See below their reply to my phone call and E-mail correspondence.
info@jomayi.co.ug 11/4/2009 wrote

foreigners are allowed to buy land/property in kampala but on leasebasis(e.g alease of 99 yrs)and when it expires you have to reknew itwe prefer cash. And if possible u deposit 70% of the initial price and wegive u only 3 months to pay the balance in 3 installmentsyes we shall assist you with the documentation,we can assist with theconstruction though here in Uganda we have aprogramme to follow beforebuilding a house/bangalow.you have to firstdesign aplan that is approvedby the district authorities.you can pay in 2 halves if you want shouse tobe constructed for you.we have very good property through out the year and even in 2009 we shallenlish some wonderful properties for all our customers both local &foreign.so they will be available.


Again I have to see and verify what I plan to buy so I have to pay the price,how ?
I have scheduled a trip to Kampala Uganda by early December 2009 to see things for myself and if convinced possibly deposit the first installment.
Also land prices for now in Kampala is very reasonable compared to other African countries might be due to their weak currency. But one has to be careful not to be conned.

Even in Kenya ask anybody that bought a genuine land,has the price dropped because of global economic melt down???. The main problem is being conned.

Mainat,the risk problem is that no African country (Except S/A) is politically stable so the fear of war always there the fact remains my next neighbour in Accra land,is a Chinese . He deposited for ten plots and hope to sale 9 and retain one. He does not reside in Accra.
I personally see Africa as one country so my destiny is not tied to Nigeria,Kenya or anyway else.

This is my candid opinion. I want to create a balance as a leverage.

Why do Africans have this Phobia to invest in their country or other African countries wheras Chinese,Japanese,European business man troupe in for business in most african countries ?

Thanks & Best Regards
Miefu are you there ?

Best Regards

Young,
Lagos,Nigeria


AFRICAN INVESTOR

@young - The 'phobia' is for the reason you mentioned. There is little 'safety' of property rights. Ask the kikuyus in Rift Valley.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB

@Much know

The figures shown are percentage of portfolio and not losses.