SEC Advises Investors To Diversify Investments To Mitigate Risks

Yemisi Izuora

The Acting Director-General of the Securities and Exchange Commission, SEC, Ms. Mary Uduk, has stressed the urgent need for investors in the capital market to be conscious and smart while making investment in the market advising that diversification is very important have to mitigate risk.

Speaking at a one-day enlightenment programme for the Nigerian Army Ordinance School, Ojo Cantonment, Lagos, weekend, Uduk who was represented by the Head Lagos Zonal Office of the SEC, Mr. Stephen Falomo, said that investors must learn to invest in various asset classes to mitigate risks and exposure.

According to Uduk, “Investment in the Nigerian capital market, just as in any other capital market across the world is a mixed bag of fortunes. A smart investor is expected to have this consciousness at the back of his mind at all times, even as he wades into the market, to pick his choice instruments or instrument of  investments”.

She said that there were good opportunities to achieve decent returns on investment in the market and urged investors to seek knowledge before investing.

Uduk, however, said that an investor must be smart to avoid some obvious mistake which could lead to capital erosion through mixed bag of investment.

She explained that an investment portfolio connotes a mixed bag of investment instruments such as shares and bonds adding that investment in mutual funds had continued to be a worthwhile investment in the recent time.

The Acting DG said the Commission has a number of initiatives that have been put in place to boost investors’ confidence.

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“We have the E-Dividend mandate system, the Direct Cash Settlement as well as multiple subscription in place. Investors have to take ownership of their investments. They have to be able to monitor their investments, attend Annual General Meetings as well as read the annual reports sent out to them.

“We also protect them through the National Investors Protection Fund (NIPF) Risk Based supervision that enables us to supervise the operators to ensure that they do not do what they are not supposed to do. And again the Complaints Management Framework enables investors to know where to complain to and how long it takes for such complaints to be resolved” she added.

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