Since 1996 the Malawi stock exchange has on average given over 30% returns to its investors. By investing on the stock exchange you get profits in two ways i.e. through dividends and through capital gains. On average every 18 months a company get listed on the Malawi Stock Exchange. If you decided to invest K1m at the listing time in each of the 16 companies that are on the stock exchange you would have invested K16 over a period of 26 years. Today that K16m would have been worth K1,523 billion kwacha. In the meantime you will also have been receiving dividends each year. If you invest on the stock exchange and you have the 26 years, you can become a billionaire.
Steps on how to get rich from the Malawi Stock Exchange
Investing in the stock market can be a powerful way to grow wealth over time. While there are no guarantees in the stock market, investing for the long term can help you build wealth through compound interest and capital appreciation. Here are some steps you can take to increase your chances of becoming wealthy through stock market investing:
- Start early: The earlier you start investing, the longer your money has to grow. This is because compound interest allows your profits to compound over time, increasing your wealth exponentially.
- Diversify your portfolio: To spread risk and potentially increase your chances of success, it’s important to diversify your portfolio by investing in a variety of different stocks and sectors. This can help to mitigate the impact of any potential losses in one particular stock or sector.
- Consider professional advice: If you are new to investing or feel overwhelmed by the process, you may want to consider seeking the guidance of a financial advisor. A financial advisor can help you create a customized investment plan that aligns with your financial goals and risk tolerance.
- Be patient: Building wealth through stock market investing often requires patience. It’s important to remember that the stock market can be volatile in the short term, but over the long term, it has historically trended upwards. By sticking to a long-term investment strategy, you can potentially weather short-term market fluctuations and build wealth over time.
- Monitor and review your portfolio regularly: It’s important to regularly review your portfolio to ensure that it is aligned with your financial goals and risk tolerance. This can help you make any necessary adjustments to your portfolio to ensure that it is working for you.
Earn interest in Malawi Stock Exchange
The stock market can be a powerful wealth generator due to the impact of compound interest. While you can make short-term profits in the stock market, it is generally safer to leave your money in the market for the long term and let compound interest work its magic.
The longer you leave your money in the market, the lower the risk you take. The S&P 500 index has never lost money over any 20-year rolling period, demonstrating the potential for long-term growth.
If you keep your money in the market for 10, 20, or even 30 years, you have the potential to build significant wealth. For example, if you invest K10 million kwacha in the market and earn a 10% return per year, taking out your profits each year, you will have a net profit of K30 million kwacha after 30 years. However, if you leave your profits to compound at a 10% rate, you could end up with almost K200 million kwacha after 30 years, or 20 times your initial investment.
To maximize your wealth-building potential in the stock market, it is generally best to stay invested for the long term.
Ready for the next step? Read our guide on How to Invest on the Malawi Stock Exchange and check our list of Malawi Stockbrokers then get some motivation by checking the list of the richest people in Malawi.