A retail investor’s perspective
In this week’s section of profiling the Zimbabwe Stock Exchange (ZSE) retail investors, we feature Takunda Mudenge.
Age: 38 years,
Hobbies: running in marathons, listening to motivational podcasts, news and international current affairs, teaching young children,
Aspirations: Takunda’s aspirations are broadly categorised into health, family, career, spiritual and financial. In each category he has annual goals and lifetime goals. These are not cast in stone, but vary as he grows older.
The investment journey
Takunda started investing because of his mother. Around 2001, when he was 18 years old, he was a temporary teacher where he received his first salary. His mother saw his interest in business as he used to follow the show, “Making money make sense” where nuggets on investing were shared.
His mother was his first investment advisor and encouraged him to buy shares. Through his stockbrokers he managed to buy his first shares. Later, through his uncle he managed to buy additional shares in different companies.
During those formative years, Takunda was influenced by R. Kiyosaki, through his book “Rich Dad, Poor Dad” to start investing.
The investment strategy
Takunda uses a hybrid strategy that focuses on investing mainly in Exchange Traded Funds (ETFs) and then he cherry picks a few stocks.
His ideal ratio is 70 percent ETFs and 30 percent individual stocks.
Takunda prefers ETFs because of the broad exposure they give him to various stocks that he either cannot afford individually or he is not too knowledgeable about.
ETFs help him average out his investment risk exposure due to their bundled nature and they are very cost efficient from a tax and brokerage cost perspective.
Presently, his investment strategy is “Dollar Cost Averaging”. This is investing at frequent intervals regardless of share price.
He either invests monthly, bi-weekly or quarterly. However, his individual stock picks are guided by a checklist that he developed, (although he does not follow it sometimes).
The criteria includes:
Size of Company (Market Cap).
Debt size (A company must not be over-leveraged).
Position within industry.
Do they have some monopolistic advantage.
Exports contribution to total revenue.
Management Diversity of products produced.
Dividend payout history.
Takunda’s portfolio is diversified across the Consumer Staples, ICT, Financials sector and Exchange Traded Funds.
Highlights and low
Takunda has realised that there are many lows when it comes to investing, but he anticipates them more as he progresses in his journey. His biggest regret was stopping to invest when he had started at the age of 18 years.
Other low moments for him was when he disposed in blue chip counters to purchase middle tier counters.
Another low point was when he divested out of the ZSE to try forex trading. Takunda has accepted all the low moments he has faced as part of the learning experience when investing.
His highlights include witnessing his portfolio grow, discovering the “dollar cost averaging” strategy and putting it into practice. He is also anticipating more highlights as he progresses on his investment journey.
Advice to Prospective Investors
As a self-taught investor, the best time to start is yesterday, the next best time is now and the ideal amount is what you have in your pocket,
ZSE Direct has opened up an opportunity for retail investors to view their portfolios in real-time, and easy options on how investors can fund their wallets,
Prospective investors should consider forming investment clubs.
Our culture has easily adopted savings clubs, so why not elevate to investing clubs,
The ZSE has too many penny stocks, that foregoing a single lunch can get one started in investing.
Information provided in this article is for educational purposes and does not constitute financial advice. You should obtain independent advice from a Registered Stockbroker or Financial Advisor before making any financial decisions.
For more information about how to invest on the ZSE, visit the ZSE training portal www.zsetraining.co.zw, email [email protected], Tel: +263 24 2886830-5