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The Young Investor: Kagiso Tloubatla

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I’m a young investor who was born in Soweto and later moved to the North of Johannesburg. I was raised by my Grandparents for the first couple of years while my parents were establishing their careers in the new South Africa with very little education.

When I was growing up I wanted to be a sportsman. I didn’t enjoy the academic side much. I was an average student throughout primary and high school. After High School I attended the University of Johannesburg to study Bcom Finance. In my second year I got an opportunity to work part-time at a private bank. This was great because I was able to pay for my fees. It wasn’t easy but it was worth it because I’m now a team leader in the same private bank. In addition I am in my final year of studying towards my Postgraduate Diploma in Management at Wits Business School.

The first time I heard about the stock market I had no idea about what it was about. Out of curiosity I started playing on the stock market. Everything looked very confusing to me. Looking at all those numbers change every second was very daunting. Movies such as “The Wolf of Wall Street” and “Boiler Room” made it seem so quick and easy to make a truck load of money. The reality quickly hit me that those are just movies and those guys are traders which is certainly not what I wanted to do.

It is important to distinguish between trading and investing, it is common for these two terms to be used interchangeably which is not correct. The goal of investing is to gradually build wealth over an extended period of time through the buying and holding of a portfolio. Trading involves the more frequent buying and selling of stock with the goal of generating returns that outperform buy-and-hold investing (Folger). With these definitions in mind I was able to build my investment strategy and structure my portfolio* accordingly.

Being up to date with market news was also another struggle for me. I had to focus on getting my degree which in itself involved a lot of reading of textbooks which I found boring. I realised that there is a lot of information available for any stock you would like to buy, but only 5% of it is useful for your decision making.

I personally don’t rely heavily on the financials to make my investment decisions. I only invest in companies whose business model I understand and companies that show growth potential. This helps me understand the effect of market news on the share price and future growth potential.

 I will leave you with these words “If you do not understand what they do, do not waste your lunch money”

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