Be assisted by an approved intermediary
The function of financial intermediary is regulated on the stock market of the West African Economic and Monetary Union (WAEMU). It is carried out by Management and Intermediation Companies (SGI) which are the only ones authorized to trade in transferable securities listed on the BRVM (WAEMU Regional Stock Exchange). They are approved by the CREPMF and must provide proof of an approval number granted by the latter. Make sure you conduct your stock market transactions with such intermediaries.
FGI is a licensed management and intermediation company.
Just invest part of your capital
Given the risk incurred, Individuals just invest the portion of their savings in the stock, which they can do without and which, in the event of a loss, will not lower their standard of living. It is important that they do not invest the income that they would need for they day-to-day needs.
Make enquiries yourself before investing
It is strongly advised to be well informed about financial products before investing. This involves learning firstly about the type of product (share, bond, etc.), the risks it entails, and secondly about the issuer, its financial health and its prospects; which can have an influence on the price.
The investor who decides to choose alone the securities in which they invest can find general information on financial products from financial intermediaries and directly from the issuer.
Issuers are required to regularly communicate pertaining financial information to the public : quarterly, half-yearly, annual figures, announcements in the event of a specific transaction, etc. Information is in principle more complete, frequent and accessible on the securities which are listed on a regulated market.
It is also advisable to regularly monitor economic and stock market information.
Risk appetite
Risks are associated with all forms of investment. Usually, an investment with a high return potential carries greater risks. Some investments may result in a total loss of capital invested , or even, for riskier investments, a loss greater than invested capital.
We generally distinguish 4 types of profile among investors:
- Cautious: you do not want to take any risk and you are looking first and foremost for a secure investment; performance is not your first concern. Your investment will mainly be in fixed income products (bonds);
- Balanced: you are looking for a balance between the performance of your investments and their risks. Your investment will be a balance between stocks and bonds;
- Dynamic: you are ready to take certain risks to achieve returns that seem attractive to you. You will invest mostly in equities;
- Offensive: your main goal is maximum performance. You will invest exclusively in stocks.
Investment Horizon
Investments are also based on your investment horizon. So depending on the chosen investment horizon, you can invest as follows:
- Short term: investments not exceeding two years. These investments can be made with Assimilable Treasury Bonds for example;
- Medium term: investments between two years and 5 years;
- Long term: investments beyond 5 years such as stocks for example.
Note that this investment horizon is also closely linked to your investment objectives: do you want to invest to prepare for your retirement (long term) or just to make money from your cash flow (short term)? Do you want to save for a vehicle (medium term)? etc. It is therefore important to define this period from the start and not to deviate from it except in exceptional circumstances.
Defining the duration of the placement also makes it possible to better organize your interventions. In the stock market, the investment can be long, so it is advisable to start as early as possible and to fund your account regularly in order to better manage the fluctuations inherent in the market.
Precautions to be taken
Markets are fluctuating, therefore it is important to regularly monitor your portfolio. This will allow you to arbitrate, if required, depending on the opportunities that may arise, for exemple deciding to cash in on capital gains, monitoring new IPOs, deciding to strengthen your portfolio to reduce costs, etc.
Fill out the customer- material information record
The market requires the identification of investors; an identification form must be filled out. A securities account opening agreement will be signed as well As a minimum, you will be requested to provide some administrative documents such as :
- A photocopy of both sides of the ID card;
- Proof of address of less than three months (invoices in your name, certificate of residence, etc.);
How the account is managed
You can decide how your account will be managed, free management or delegated management ?
Free management allows you to make your investment decisions on your own.
In delegated management, you are assisted by a professional account manager such as FGI, via a management mandate.
Funding of the securities account
To fund your account opened with FGI for the purchase of securities on the market, you can:
- hand over a check;
- make a cash payment in our bank accounts;
- initiate a bank transfer;
Place a stock market order
Stock market orders can be placed directly through your online account. But you also have the possibility of placing a stock market order by completing a form to buy or sell securities made available to you and specifying the terms below:
- The first and last names of the account holder;
- The title ;
- The amount ;
- The price ;
- Validity: valid for the day or on a specific date (depending on the date you have defined without exceeding 3 months).
The rules of operation of the market require that the provision be available at the time of placing the purchase order; short transactions are not permitted.
The price can be indicated according to the following methods:
- the limit order is the order by which the investor sets the maximum price he/she is willing to pay to buy securities or the minimum price at which he/she is willing to sell his/her securities;
- the market order is that which allows the investor to buy or sell securities without a price limit, ie at the market price;
- the best order is not accompanied by any indication of price. The buyer sets no maximum price and the seller no minimum price to complete his transaction.
If all the information is valid, FGI transmits the order to the Stock Exchange for execution.
When the transaction is executed, a transaction notice specifying the terms of the transaction will be sent to you. It will tell you the quantity purchased, the price and the charges. The settlement of transactions is made within three days on the RSE (Regional Securities Exchange).