How you can invest in the American stock market from Nigeria

As the year is ending, my plans are not of how I will spend this Christmas, but of how I will invest for the new year. Spending on investments has become a growing hobby for me—and one that I consider to be rewarding, and that helps secure a better financial future. 

In the world's new economy, one of the most lucrative assets that anyone can have is investment skills, and investment hacks are already the most lucrative information to have at the moment (even though getting fish handed to you for supper every now and then isn't quite the best bet for the long run). 

And when I'm talking about investments here, I am not talking about physical assets like lands only. I'm talking more about financial assets. 

Yes, financial assets, including digital assets like crypto and NFTs, as well as traded assets such as stocks, bonds, ETFs and Index Funds. 

Financial assets will be the lifeblood of future economies, and the sponsor of human living in a few years to come. And this is why Defi, NFTs and Metaverse are pushing new frontiers in financial services and social interactions around the world today. 

But, I have a certain worry that has inspired me to write this: Many people have a fundamental misconception about making investments here in Africa and around the world. We love getting investment hacks a lot, but we're too lazy to acquire investment skills. 

People will rather pay someone to tell them which crypto asset to buy, or which stock to buy, than to do their own research to find out.

And even when told what to buy, they would seldom do their own research on the assets before investing. And this is one leading reason why so many lose their funds in crypto or stock trading.

Please don't get me wrong, I am not in any way trying to discountenance the expertise, experience and due diligence that portfolio managers and investment fund managers offer as value within the financial management space. But I am only trying to highlight the fact if only we could pay more attention to most of the information that's already available to us, we'd probably be able to do more for ourselves in terms of investing profitably.

It is a well-known fact that when you are informed enough to make investment decisions with your money, you will be able to identify and make riskier investments which will give possible higher returns. But a fund manager is not likely to take certain levels of risk with money that doesn't belong to them. 

What does it mean to make investments? 

Making an investment involves researching and educating yourself well enough about a business venture or interest-yielding asset, in order to determine whether it is well-positioned to succeed or improve in value over time, and whether it has the right structures for to achieve that success, then you put your money into it so that when it does succeed, you'll make profits upon your capital investment. This is particularly true of digital assets like crypto and NFTs, as well as traded assets like stocks and ETFs, and physical assets like real estate. 

So it follows that investments are more about research and education than about any other thing. For example, when I bought a few shares in Tesla, it wasn't because it was funky to do so. Rather, it was because I had taken time to educate myself about what the company was doing (electric vehicles and electric vehicle technologies), whether the world has space for those products in the future and how much space it has, as well as whether or not the company has demonstrable competence to deliver and keep delivering those products. 

How I educated myself about making investments 

I educated myself by following the news and the people that make the news. Two pivotal persons were strategic in improving my investment life over the past decade: President Goodluck Jonathan of Nigeria and President Donald Trump of the United States. 

The two were news makers in their days, and ran transparent administrations that showed me in real time how government works, how money moves around in the world, how to follow the movement of money, who were major stakeholders in the world that were administering and making critical decisions on the deployment of money, and most importantly, how their decisions and my actions matter a great deal!

That was also when I started understanding the major private sector players that I needed to keep a tab on, and most importantly, THE MOST CRITICAL AND EMERGING SECTORS OF THE ECONOMY THAT I NEEDED TO PUT ON MY DASHBOARD FOR CONSISTENT MONITORING OF WHATEVER HAPPENS IN THEM, TO KNOW HOW AND WHEN I SHOULD ACT FOR MY OWN BENEFIT.

That was how I discovered the electric vehicle sector, and even at that, I WAS QUITE LATE TO INVEST IN IT. The most profitable investors were at least 5 SOLID YEARS ahead of me in spotting the sector and its major players, and taking their positions in the market (investing). If your investment mind isn't awake, you will miss out on opportunities; that is a fact. The first step in acquiring investment skills is becoming investment-conscious. If you are not conscious, you will not become aware of opportunities (and early too). 

My exposure has also taught me why the rich seldom play the politics of exclusion or emotion. They are too invested in too many diverse interests to pander to such things. 

Let me give you an example: Many Americans who are heavily invested in Chinese stocks do no want any trade wars with China. Let me rephrase: Their stock portfolio does not want any trade war with China. Matter of fact, it wants a collabo. It wants a trade deal. It wants to give up more resources (even if it's human resources or manufacturing capacity at home) so that their businesses in China can do well for their portfolios smile back at them. 

You can say that they aren't patriotic, and you could be right. But everyone's allegiance if first to themselves and their faith. So, this does not have any more to do with patriotism than eating food has. It is a personal business. 

If you were in their shoes, what would you do? 

Back to what I was saying about us and poor investment skills

We don't like to do investment research. But I promise you that it is one of the most rewarding and educating things that you can ever do with your mind (except of course, meditating on the word of God).

And this is largely because we are often impatient.

But it is the impatient that often loses the most in investing. As they say, the patient dog eats the fattest bone.

Let me give you some numbers. 

Tesla sold its initial public offering in the year 2010 at an IPO price of $17 per share.

But as at now, a Tesla stock is priced at $1,051 per share.

So, a $100 investment in TSLA stock as at 2010 would currently be worth $6,182.

Similarly, a $1,000 investment would currently be worth $61,823.

Consider that $1 was equal to ₦147 on the average in 2010. And now, it is ₦570.

So, those who denied themselves the instant gratification of spending $100 (₦14,700) in 2010 are now worth ₦3.5 million today because of it. They're licking their oily plates now.

As I said earlier, I was over 5 years late to this party myself. In 2010, I was a freshman civil engineering student at FUTO carrying my drawing board up and down for engineering drawing classes that I cannot even remember right now. But, ya dịba! (let it be!) 

Also, even if I had wanted to invest in Tesla in year 2010, there was no easy way for me to do so as a Nigerian, right here from Nigeria.

But, thankfully, there is now. And that's why writing this.

The Dynamic Fintech Solution for Stock Investing Called Trove

A Nigerian Fintech company, Trove Finance, has made it possible for anyone in Nigeria to buy, sell, or hold American, Chinese and Nigerian stocks, right from here in Nigeria.

Yes, you read that right! You can buy, sell or hold the stocks of those companies you admire, like Amazon, Google, Facebook, Disney, Tesla, Ford, General Motors, and many more stocks that are trading on the New York Stock Exchange (NYSE) through the Trove mobile app, just by creating up a Trove account on your smartphone. 

Trove also provides you access to some Chinese stocks that are listed on the NYSE as well. 

And if you want to invest in companies that are listed on the Nigerian Stock Exchange (NSE) instead, Trove also provides you access to them too, such as Dangote, Julius Berger, GTBank shares, etc.

In fact, if you have a lower risk appetite that prefers ETFs and Bonds, Trove also gives you access to those as well.

If you are reading this and find it quite interesting and want to check it out, then start by creating an account with Trove by clicking on this specific link.

Here's why you should use the specific link above: If you do so, Trove will gift you 5 FREE shares of either Dangote Sugar or GTBank Plc, just to say "Welcome on board".

It is an open secret among those who know me, that I love Nigerian and African projects that are building or have built innovative products that are comparable with companies that are hitherto found abroad.

And Trove Finance is currently one of them. Honestly, I LOVE what Trove has done and is doing! In my opinion, their innovation is top notch.

Let me give you an example

Everyone knows that the biggest challenge when it comes to investing in traded assets like stocks and ETFs is DOING THE RESEARCH. You'll often have to surf the net for long hours, trying to scoop up information about various companies or assets that you are considering for investment. And it can be tiring to find the articles, let alone reading them.

But Trove app uses machine learning to solve this problem for you: Under every asset listed on Trove, you are provided with recent-dated related articles about the company or the asset, so all you have to do is to click and read. Great, right? 

Of course you will still have to surf the net for some more info, but Trove gives you at least a 60% headstart at that.

Also, Trove app architecture and design is so simple to navigate, and their portfolio section does a great job organizing your assets and telling you how profitable or not that they are. Amazing, right?

Let me now blow your mind a little bit: With your Trove account, you get to earn dividends on any dividend-paying stock that you own there. Yes, you do! Straight into your Trove account yearly when due.

And that's not all o... The company fully recognizes you as one of their shareholders, just like those living in the United States too. For instance, I receive invitations from Tesla for shareholders meetings in the same manner that they send to their other shareholders that live in the US too. And if they need your vote on anything they're doing, they'll send you a mail requesting for it as well. Amazing stuff!! 

That's not all. You can fund your Trove account with as little as $10 and buy any stock of your choice, even if it's a fraction of it. For instance, if you cannot afford to buy 1 Tesla stock at $1,051, you can choose to buy ₦10,000 (~$20) worth of Tesla stock. That will amount to about 0.02 Tesla shares. Cool, right? 

Now, I know some of you may be wondering how they are able to make the service work so smoothly and you can buy, sell and hold American stocks, and earn dividends right from here in Nigeria, and even get full recognition from the companies that you buy into.

Let me explain a little how it works, then you'll find out the rest when you create your account.

How Trove Works

Trove Finance is not a stock broker. It is a Fintech company that partners with stock brokers and issuing houses in the US and Nigeria, to provide access to the trading of securities that are listed on the NYSE and NSE.

So, in the US, Trove partners with the US financial technology company, Drivewealth LLC https://www.drivewealth.com/, which provides financial brokerage services through their embedded-investing technology that allows anyone to trade anything, from anywhere, and at anytime. Drivewealth manages the books and records of US stocks for Trove's users. Hence, every Trove user is issued with a DriveWealth account number. 

But the actual stocks aren't held by DriveWealth (they only manage the books). They are held in custody by ICBC Financial Services, New York, a clearing house. According to their website, they are a member of the NYSE, NASDAQ, OCC, DTCC, FICC, MBSCC, and the SIPC (through which they provide insurance backing for customer's assets held in their custody).

For Nigerian stocks, Trove partners with ARM Securities. The stocks are either held directly in your name, or in custody by ARM. 

Conclusion

I have written this information because of two reasons:

1. Those who do not like crypto can benefit from investing in the stock market, even the American stock market (after all, we use lots of products created by American companies, like Facebook, movies created by Walt Disney, products sold and shipped by Amazon, etc). If we use their products in Nigeria, we can as well find them to be good assets to hold as investments. 

2. Those who are already invested in crypto can decide (rightly so) to diversify their investment funds by putting some of it in the stock market, instead of leaving it all in the crypto market.

Please don't kid yourself, DIVERSIFICATION is very important in investing. I dare say that it is crucial. 

Even the Bible said so: Ecclesiastes 11:2 says, "Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth."

If you need to do so now, please diversify your funds. It is healthy. Stand on solid ground.

What I have just shared with you now is what some people will package (rightly so) as a Masterclass and sell to you for $100, and you will buy.

But I have shared it with you for free because you are on my contacts list and are a viewer of my status here. And I am not sharing it elsewhere, except within my paid group.

I hope you'll do something meaningful with this free information.

If you are reading this and find it quite interesting and want to check it out, then start by creating an account with Trove by clicking on this specific link.

Here's why you should use the specific link above: If you do so, Trove will gift you 5 FREE shares of either Dangote Sugar or GTBank, just to say "Welcome on board".

I want you to remember me as the friend that made you invest profitably. And by God it shall be so.

Thank you for reading.

END

Chukwubuikem Paul Anunaso is a civil/structural engineer in Lagos, Nigeria. He is a happy customer of Trove. The information provided in this article is for educational purposes ONLY. Readers are advised to do their own research before using any of the products mentioned, or doing business with any of the companies mentioned. They may also seek professional advice from a financial advisor.