In the last edition, we discussed the plight of two close friends, Nkechi and Temitayo who lost a lot of money in the stock market. They invested in the same shares through the same stockbrokers with identical sums of money spent. Both of them were bankers though employed by different banks, their incomes at par, and they were about the same age with similar life styles.
With the crash in the stock market and the present economic down-turn, Nkechi is almost a physical and an emotional wreck, while Temitayo does not seem to be worried at all. Why is this so? Simply put, Nkechi and Temitayo are two different people. Their fears, confidence and optimism are totally different. The only solution for Nkechi will be for her to find out what is the right thing do in her present situation and then proceed to work at it. Now let us see how to write a fiscal prescription for Nkechi.
To write a perfect fiscal prescription for Nkechi, or anyone for that matter, we need to find out what her fears are and what would make her feel secure. Secondly, we need to look into her personal goals and what is more important to her, does she care more about her emotional well-being or how much money she accumulates? This was not an easy task for her as she would have preferred to have all at the same time.
After all said and done, Nkechi decided that her emotional well-being was more important to her. So to stop being afraid and depressed she needed to start taking the right actions for herself. She decided that she needed to sell at least 75 percent of the investment in her portfolio right now! Then with the help of her stockbrokers Nkechi decided which stocks would be the best to sell and which to keep.
On the other hand, Temitayo was as cool as a cucumber. She had no anxieties about the fact that she lost so much money (N20m dwindled to less than N6m). Not that she was not bothered but she has refused to dwell on it. She also did the review chart exercise as shown in the two previous editions but came to a different conclusion from Nkechi who probably has no pressing financials. So rather than selling her stock, Temitayo is looking towards buying more stocks at the present low rates.
So you see how things worked out? Although both of them had exactly the same stocks, one was ready to sell while the other wanted to stay invested. So while selling was the right decision for Nkechi, Temitayo was thinking about buying more. Different people, different moves, different results. Notice that Nkechi did not just sell her stocks blindly. So, if you are faced with the same situation asNkechi and Temitayo (TO SELL OR NOT TO SELL YOUR INVESTMENT) I want you to undertake the same thoughtful, careful process that Nkechi did. First, she had to look really hard at what was right for her, given who she is and what she was feeling and needing in that moment. Next she was careful to put her emotions and her needs on a scale in order to decide how much she needed to safeguard in order to find her balance. Only then did she shift her attention to how best to carry out her decision and with some professional advice, she was able to do what was right for herself and her money.
The good news however is that out of the money she realized from the sales of her stocks Nkechi paid off her debts, brought her mortgage account up to date and now has peace of mind.