Capital market players have been advised to diversify their investments in a bid to shield them against risks.
It is in line with this that the Head-Banking and Non-Banking unit, Financial Sector Division (FSD), Ministry of Finance, Andrew Ameckson, maintained that a well-diversified portfolio is the bedrock of investor resilience.
“To our capital market players, we know that the industry has made significant strides in recent years; but we must remember that diversification is our shield against the unexpected and unpredictable. This vital strategy safeguards our investors from the severe repercussions of single, unforeseen events, thereby preserving their wealth and promoting stability,” he said.
He added that investors must accept that risk is an integral part of investment, and take a proactive approach to manage and mitigate it. He further urged them to make informed decisions and maintain a balanced perspective to navigate the challenges and uncertainties of the financial market while working toward long-term financial goals.
Reiterating the importance of resilience, education and inclusivity in the financial sector, he stressed that the country’s development largely depends on the financial sector’s growth, hence a collective effort is needed to ensure its well-being and stability.
Also, given the current economic challenges and uncertainties, Managing Director-Ghana Stock Exchange (GSE) Abena Amoah indicated that it has become more crucial for investors to equip themselves with the necessary tools to weather storms in the ever-evolving investment landscape.
She explained that by taking proactive measures to build resilience – such as setting realistic investment goals, staying informed about market trends and seeking professional advice – investors will be in a better position to maintain their emotional well-being and make informed decisions even during challenging times.
“Financial literacy has become even more important than ever to help investors navigate the uncertainties surrounding investment options.
“GSE believes that embedding financial literacy is a call to national duty, and we need the support of all stakeholders to make it happen. Financial literacy should be incorporated into our school curriculum to teach our children the basics of savings and investment,” she said.
The stock market has proven to be an ideal source of diversification for investors during the economic downturn.
By end of the initial trading week in October, the GSE Composite Index (GSE-CI) had achieved a 4-week increase and a year-to-date gain of 2.38 percent and 28.36 percent respectively.
For his part, Chief Executive Officer-Central Securities Depository, Joseph Oko Abumah Lartey noted that enhancing market transparency through innovative initiatives is pivotal to fostering investor resilience.
He further added that it is vital to offer investors near real-time access to transactional updates regarding their securities’ accounts.
As such, he said: “In the broader securities market, the CSD is actively considering the implementation of data science methodologies, machine learning and artificial intelligence tools to enhance the dissemination of valuable information aimed at aiding investors in their decision-making processes.
“As the premier financial market infrastructure responsible for safeguarding issued securities and overseeing clearing and settlement operations in our nation’s securities market, we are firmly committed to contributing in the enhancement of investor resilience within our market,” he said.