In Nigeria, the investment landscape is different. A significant majority of the population tends to view investment from a short-term lens (typically 1 – 3 years).
When making investment decisions everyone tries to be as rational as possible. We take into account every variable that may hurt our investment. We ask all the questions or pawns of the decision-making to friends and family who may not be experts on investment. Consequently, we experience a set of biases that cloud our decision-making.
We will consider 4 of the common mistakes people make when it comes to investing and how to avoid them.
Lack of Due Diligence
If the deal seems too good to be true, then it probably is. Nigerian’s tend to always jump on “investment” trains that promise money doubling without understanding the investment model. These decisions are usually based on ‘word of mouth’. The bias that a person we revere made an investment doesn’t mean it is good for everyone or genuine.
The rule of thumb is to ask more questions about any investment, understanding it before diving in. At Green Hills Cassava Farmstead, we are transparent with our processes and encourage our investors to ask us questions and we always provide plausible, genuine, and satisfactory responses.
Fear of Missing Out (FOMO)
Nigerians tend to make impulse investment decisions when an investment opportunity is sold as time-bound, usually for a very short period of time. It is important to understand the intricacies of an investment opportunity before exploring it.
This doesn’t mean that there aren’t investments that require quick decision-making but to avoid mistakes, it is important to have as much information as possible before making an investment decision.
Overconfidence as a result of herd mentality is another major cause of loss in investment. People tend to feel confident in an investment when an illusion that a very
large number of people are involved. To avoid this illusion, a little more work should go into asking questions about the investment from experts to avoid the bias that comes from the herd mentality.
The idea that investment should only be short-term is not an ideal mindset for an investment journey. A significant number of people around the world do not seek to diversify their investments and hold real assets. This is problematic because portfolio investments are volatile and present high-risk situations where an individual could lose all the money invested.
Greenhills presents you with a hybrid solution. Investing in Greenhills guarantees returns on farm cycles and you own the land FOREVER. The asset is 100% transferable and you earn in perpetuity as long as the land is arable and there is demand for food.