Investors, especially individuals who do not have much to spend are being advised to put their funds in collective investment schemes.
According to the Chairman of the Nigerian Securities and Exchange Commission, Senator Udoma Udo Udoma the unit trusts or mutual funds are becoming popular and profitable because they have a more balanced portfolio for protection against massive loss.
He was speaking to Joy Business at an ongoing workshop for Financial and Economic Journalists in Lagos.
He said it was naturally difficult for small investors to track the performance of a variety of stocks, "and if you buy only one stock, what if you've chosen the wrong one and it doesn't perform well?"
Senator Udoma said because unit trusts are required to, and do have, professional managers, it is better to invest in unit trusts because "The professional manager has the time to track the performance of all the various stocks and they know when to sell and when not to but can also spread your risk so that you are not exposed to just one stock."
Source: Joy Business/Ghana
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