While scanning through a pile of old documents in an abandoned file cabinet, I stumbled on some share certificates belonging to a relative. He had given instructions for all those old documents to be burnt to keep the cabinet clean. The share certificates covering 7,500 GCB shares were going to be consigned to the refuse bin.

That is GHC 35,000 at current prices gone. Perhaps the only thing that could save this fortune for a retiree d banker was his memory that in 1996 he purchased these shares when they were being offered during the Initial Public Offering. of these shares. The extra work would have been to approach a broker to perhaps trace them through some indemnity arrangement with the Registrars of these shares. Yes, and for those who have misplaced their share certificates, you have not lost them. Kindly approach your broker. They will assist you to trace these shares and dematerialize them for safe-keeping at the Ghana GSE Securities Depository (GSD) to avoid these challenges in the future.

There are several reasons for investing in equities/shares. The varying reasons have resulted in the categorization of investors into income, growth etc. investors. Growth investors would normally focus on long term appreciation in price, while income investors will target stocks that can potentially pay dividends. Price appreciation would normally come from growth in the value of the underlying business of the stocks traded.

I do not have any style when I buy stocks. I do not buy shares because of the immediate personal gains I expect..- I buy shares because I believe in posterity. I do not care about stock prices and I do not check to see their direction and implications on my investment. Theory has proved that in spite of the “scary” volatility in share prices, in the long run, the equities outperform the fixed incomes instruments.

Keynesian theory suggests that we should not care about the long run, because in the long run, we will all be dead. In equity investment, even if we die in the long run, we should still care about the long run. What is this long run? Investment horizons range from short, medium to long term. The table below summarizes the tenor of each of these horizons:

HORIZON                                                        PERIOD
Short term                                                      Less than 12 months
Medium term                                                  Between 1 year and 3 years
Long term                                                       5 years plus


The GCB shares I am referring to were bought 17 years ago. At a purchase price of GHC 0.05 per share (500 old cedis), the 7,500 shares cost GHC 375 (3.75 million old cedis). At the time of putting this piece together, the GSE board read GHC 5.10 per share for the stock. This represents a 10,100% appreciation in value. At GHC 5.10 per share, the value of the 7,500 shares is GHC 38,250 (3825.5 million old Cedis). This means for every cedi invested in GCB in 1996, investors have gained GHC 102. The retiree sold only a third of his shares and made about GHC 12,000 less commissions and fees. Looking at GCB’s performance and growth trajectory, the residual represent a fortune for him and generations unborn, should the patience continue.HORIZON      PERIOD
Short term Less than 12 months
Medium term Between 1 year and 3 years
Long term 5 years plus

This is surely the reward for patience over 17 grueling years during which the Ghanaian bourse has seen some turbulent times, with significant volatility in the stock represented by the chart below.

Source: Ghana Stock Exchange

Patience in equity investing really pays, but such patience comes with significant education. Apart from the natural inclination to risk aversion, many who have panicked at short term price volatilities and loss of money on the stock market have not been adequately educated and advised on the behavior of the market.

Investor education and awareness significantly influence investor temperance in equity investing. I have heard stories about threats of divorce, suicide and terrorist attacks on some brokerage houses because of some misunderstanding with stock market investment mechanics. Many of the disappointed investors have overreacted to market swings because they have mismatched their investor profile, return expectations and appetite. They have short term return expectations, but have invested in long term products. Even though market timing and short term price appreciation is common on the stock market, in many instances, it is the exception than the norm. Investors who do not have the heart for the downside of such events should not venture. We need to understand that such aberrations can benefit and hurt at the same time. It is however best to hold one’s heart for the long term upside, which almost always pays.