Beyond the Real Estate Myth: Why the Stock Market is a Safer Bet for the Informed Investor

 Comment

“Stock market is good only for those who are patient and those who can absorb pressure in case of sudden depreciation and losses. If you know you are hypertensive or impatient, you better avoid investing in stocks and invest in landed properties in good location!”

My Response

While it is true that the stock market requires patience and emotional discipline, it is not accurate to say that only a certain “type” of person should invest in it. The real issue is not hypertension or impatience, but strategy and risk management. A well-structured, diversified portfolio across strong, fundamentally sound stocks, sectors, and asset classes can significantly reduce the impact of sudden market shocks. When one spreads investments wisely, temporary losses in one stock are often balanced by gains in others.

Moreover, the stock market is naturally cyclical—it rises and falls over time. Short-term dips are normal and do not automatically mean real loss unless one sells at that moment. For people who are emotionally sensitive to price movements, a simple solution is to avoid checking their portfolio value too frequently. Constant monitoring magnifies anxiety, even when nothing fundamentally has changed.

 

The liquidity and entry barrier in another major issue. The above comment suggests "investing in landed properties" as an alternative. However, real estate in prime locations requires massive upfront capital (often ₦10M – ₦50M+) and is illiquid compared to stocks. If you have a medical or financial emergency, you cannot sell a "bedroom" of your house to get cash. Stocks allow you to start with virtually any amount, say ₦1,000, and provide the liquidity to exit whenever you choose within just T+2 (trading day plus 2 additional working days) settlement period.

Bricks and mortar have become the silent vault for Nigeria’s stolen billions. By utilizing proxies to shroud their tracks, the architects of corruption have transformed the landscape of cities like Lagos and Abuja into a graveyard for public funds. According to former EFCC Chairman Abdulrasheed Bawa, a staggering 97% of looted assets find their final resting place in real estate. The extensive forfeitures linked to former power players - like Petroleum Minister Diezani Alison-Madueke, CBN Governor Godwin Emefiele, and Attorney General & Justice Minister Abubakar Malami - serve as a sobering reminder that while these assets may be fixed in stone, the shadows of their acquisition are increasingly coming to light.

Real estate, like stocks, also carries risks — maintenance costs, legal issues, and market downturns. No investment is completely stress-free. What matters is choosing investments that match one’s financial goals, time horizon, and risk tolerance. You don't have to choose between your health and the 51% returns the Nigerian market is currently offering—you just need a balanced asset allocation. Even Dangote acknowledged that he would have been way richer had he invested in stocks rather than building an oil refinery.

In summary, the stock market is not for the “fearless,” but for the informed, disciplined, and diversified. With the right approach, even conservative investors can benefit from long-term wealth creation without unnecessary emotional pressure.

Real estate is a great asset, but it is not a replacement for the compounding power of the stock market. Don't let the fear of 2008 or daily price "noise" rob you of the wealth-building opportunities of 2026. Invest logically, not emotionally.

 

HOW MANY STOCK MARKETS ARE THERE — AND WHAT SHOULD YOU KNOW AS AN INVESTOR?

Many people say “the stock market” as if it’s just one place.

In reality, there are different types of stock markets, each serving a unique purpose.

Understanding this will help you invest smarter, manage risk better, and avoid costly mistakes.

🏛️ 1. Primary Market (Where Shares Are First Sold)

This is where companies raise money directly from the public.

Examples:

•⁠  ⁠Initial Public Offer (IPO): When a company sells its shares to the public for the first time to become a publicly listed company. For example, Dangote Oil Refinery is expected to be listed this year, likely in April.

•⁠  ⁠Public Offer (PO): When an already listed company sells additional shares to the general public to raise more capital. TIP had recently closed its PO, 2 weeks ago, selling a share at 9.5 naira. The share price has closed today at 15 naira, i.e., about 58% discount for those who bought it.

•⁠  ⁠Rights Issue (RI): When a company offers EXISTING shareholders the right to buy more shares at a discounted price in proportion to what they already own before a given qualification date. FIDSON has a right issue that closes at the end of this month. A share via the RI is 35 naira, but closed today at about 70 naira, i.e., about 50% instant discount for any eligible shareholder on the register of the qualification date (12 November 2025).

•⁠  ⁠Private Placement: When a company sells shares to a selected group of investors (new investors, institutional investors, high-net-worth individuals, strategic partners) to raise capital. Many banks (UBA, FIRST BANK, etc.) used this method to raise their capital and meet the new CBN bank recapitalization.

Here, you buy shares directly from the company, often at a discounted price. 

🔑 What to know:

•⁠  ⁠Great entry point applicable to IPO and Private Placement

•⁠  ⁠Prices are fixed for the duration of the offer

•⁠  ⁠Good for long-term investors

📊 2. Secondary Market (Where Shares Are Traded Daily)

This is the regular stock market where investors buy and sell shares among themselves.

Examples:

•⁠  ⁠Nigerian Exchange (NGX)

•⁠  ⁠NASD OTC Market

•⁠  ⁠Newyork Stock Exchange (NYSE), USA

•⁠  ⁠London Stock Exchange (LSE)

Prices move up and down daily based on demand, company performance, and economic news.

🔑 What to know:

•⁠  ⁠Prices are dynamic

•⁠  ⁠You can profit or lose

•⁠  ⁠Research matters

🇳🇬 3. NGX vs NASD OTC (Nigeria’s Two Main Markets)

NGX (Nigerian Exchange)

It is the only market for all publicly LISTED companies like:

BUA FOODS, Jaiz Bank, GTCO, Dangote Cement, etc. 

There are 143 companies currently whose total value of all shares, i.e., market capitalization (cap), stands at 106 trillion naira, monitored using the all-share-index or NGXASI. Market cap is the primary way investors categorize companies by size, such as large-cap (stable, established, e.g., MTN, BUA FOODS, Seplat), mid-cap (growth-oriented, e.g., FIDSON, Julius Berger, PZ, Jaiz Bank), or small-cap (high potential but volatile, e.g., NCR, Eunisell, Deap Capital Management).

•⁠  ⁠Highly regulated

•⁠  ⁠Very liquid (with variation from one company to another)

•⁠  ⁠Transparent

NASD OTC Market

NASD OTC stands for the National Association of Securities Dealers Over-the-Counter. Think of NASD OTC as a “waiting room” or alternative market for companies that are public but not yet ready, willing, or eligible to list on the NGX—yet investors can still buy and sell their shares in an organized, regulated way. There are about 45 companies with a total market cap of 2.2 trillion naira, monitored using the securities index or NASDSI.

For UNLISTED PUBLIC companies like:

MTN Nigeria (before listing), MRS Oil Nigeria Plc, Access Bank Plc, etc. All companies have a suffix, PLC.

•⁠  ⁠Less liquid

•⁠  ⁠Some delisted companies from NGX

•⁠  ⁠Companies preparing for future NGX listing

•⁠  ⁠Special purpose or restructuring entities

•⁠  ⁠You must go through a licensed stockbroker. Some brokers give you access to both NGX and NASD OTC stocks.

Compared to NGX:

•⁠  ⁠Easier and cheaper to join

•⁠  ⁠Less stringent disclosure rules

•⁠  ⁠Attractive to mid-sized or transitioning companies

🌍 4. Global Stock Markets

You can also invest in:

•⁠  ⁠U.S. Stocks

•⁠  ⁠European Stocks

•⁠  ⁠Asian Markets

•⁠  ⁠Saudi Arabian stocks (from 1 February 2026 if you are a non-resident)

While international markets often command the spotlight, the Nigerian Exchange (NGX) has quietly emerged as a premier destination for high-yield returns. Last year, the NGX delivered a staggering 51% return—vastly outperforming the US market’s 17% and securing its position as the second-best performing market in Africa. For the Diaspora, Nigeria represents a frontier of untapped potential. We are seeing a global shift; for the first time in US history, equity investments have surpassed real estate in popularity. While the allure of property in Lagos and Abuja is undeniable, those who master the art of stock selection could find that the capital markets offer a superior vehicle for wealth creation.

Using apps like:

Bamboo, Trove, Chaka, etc.

🔑 What to know:

•⁠  ⁠Dollar exposure

•⁠  ⁠Global diversification

•⁠  ⁠FX risk involved

📌 What Every Beginner Must Know

Before investing, always ask:

✔ Which market am I entering?

✔ Is it short-term or long-term?

✔ How liquid is this market?

✔ What risks are involved?

✔ Do I understand this company?

The market type determines:

•⁠  ⁠Your risk level

•⁠  ⁠Your strategy

•⁠  ⁠Your patience requirement

•⁠  ⁠Your expected returns

🎯 Final Thought

There isn’t just one stock market.

There are different markets for different goals.

Smart investors don’t just buy shares —

They understand where, why, and how they are investing.